Would you buy a mortgage from a car salesman?

Despite all that's happened in the last two years, home loan offers at ridiculous terms are still falling out of the sky. One fell on me recently, in the form of an unsolicited call to my cell phone.

It was Courtney from "Finance Administrators," a company that she said helps consumers get lower mortgage rates. She said she might be able to "drastically reduce my interest rate without having to refinance." Who wouldn't want to do that? I asked her to tell me more.

Courtney put me on hold. Then, Rick came on the line. Courtney introduced us, saying that I had a mortgage with a rate of 6 percent. Then she hung up and let Rick and I hash out the details. (Neither Courtney nor Rick would tell me how they got my phone number.)

But Rick immediately told me he could get me a home loan in the 2 to 4 percent range. When I expressed incredulity, he said he worked for a serious outfit called the Prodigy Law Group. These were not the loan modification scam artists I'd heard about in the news, he said. These are real lawyers who get relief for people in trouble, said Rick.

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"We work with people who fit a certain criteria," he said. "Hardship programs. People who have a cut in pay. Medical expenses. Or people with a bad loan and are paying only 1 percent interest but it's ready to adjust. Those are considered hardships."

But even if I didn't qualify under those terms, Rick said I still could benefit. "A loan audit," he said. "We look for federal violations. We pursue legal actions against the bank that puts them in a corner. ... Ninety-something percent of loans out there have violations. If you find something wrong you can do whatever you want."

"Decide what side of the fence you want to be on."

Sensing that I had no love lost for banks, he pressed on, putting on a full-court press that would rile anyone frustrated by the recession and bank bailout.

"(President) Obama has given them money and they are just trying to hold on to the cash," he said. "If the banks were doing their job, we wouldn't be doing any business."

He then said I was foolish for continuing to pay my mortgage at my current rate. I'd be better off not making my monthly payments, then demanding a change in terms, he said.

"You probably haven't done any research on this, but if you are the guy who pays the bill and you do everything right, you will pay the higher rate," he said. "If you don't, you will get the 2 percent rate. You have to decide what side of the fence you want to be on."

Rick was suggesting that I engage in a tactic used by credit card settlement companies, explained in a recent column. Basically, firms tell consumers to stop paying their bills, save the money in a special account, then enter negotiations with the lender after some time has passed and negotiate a better deal.

I told Rick a 2 percent mortgage rate sounded enticing, but I'd have to think about it. I asked for his full name and phone number, which he gave me. Then I did some research.

Prodigy Law Group was founded in February of this year, according to its Web site. It's based in Southern California, but the site lists member attorneys across the country. The site also is peppered with warnings to consumers about scam loan modification companies.

Prodigy works closely with a firm named Homeland Support Services, which says it takes inbound calls from consumers looking to refinance their mortgages. The two companies share the same address in Irvine.

In an advertisement placed online under the heading "Legal Jobs Around Orange County," Prodigy encourages salespeople with experience at high-pressure tactics to apply.

"LOOKING FOR CURRENT OR EX CAR SALESPEOPLE … WE HAVE SEEN THESE TYPE OF PEOPLE DO VERY WELL!!! Applicants will be taking all in-bound calls," the ad says.

It makes no mention of experience in the complex mortgage industry. It does promise potential earnings of $4,000 to $6,000 per month, however.

A Google search unearthed a social networking page posted by Rick in which he described himself as a former car salesman.

When I tried to call Rick back to get an idea of the cost of his program, I was told he had been "promoted … or no longer works here." Instead, Ed, who answered Rick's extension, picked up where Rick left off.

He repeated the pitch that he could help me get a 2 to 4 percent interest rate. For a $200,000 mortgage, the fee would be $3,000, he said – payable up front. When I said that sounded expensive, he was ready with a response.

"It is not a lot of money," he said. "It's much less that it would cost to refinance. The money needed to be paid up front, he added, because "this is a law firm, and that's like a retainer fee."

And when I asked how he could get me an interest rate that was below market, he said it was part of a special government subsidy program.

"Let me put it this way. It's like food stamps," he said.

"Never heard of them"

When I spoke with attorney Seth D. Heyman, who founded Prodigy, he disavowed much of what the two salesmen said in their marketing pitches – including the comparison to food stamps. He attributed the disconnect to a third-party marketing effort gone awry.

Heyman insisted the firm doesn't engage in telemarketing, insisted he didn't know either Rick or Ed, and stated that he didn't believe either of them had worked on behalf of Prodigy. He said the firm takes great care to be transparent and honest when marketing to potential clients.

"We require anybody who does intake for use to adhere to a strict set of principles," he said. "We have them sign a very detailed affidavit that they will (not deceive consumers)." And the company never tells anyone who can afford to pay their bills to stop paying their mortgages, he said.

He offered two possible explanations for the sales pitches I received: Either both salesmen were operating as rogue employees of the third-party intake service, or they were engaging in corporate identity theft and had no association with his firm at all.

"Until I investigate and find out who these folks are, I can't comment," he said.

He said the car salesman ad was placed by their "intake" service, Homeland Support Services, and that he was "flabbergasted" by it. The company has stopped asking for car salespeople to apply, he said, adding, "It hurt our credibility."

Heyman said Prodigy helps clients who are in danger of missing their mortgage payment. It does require an up-front payment of $2,000 to $4,000, but many consumers are allowed to pay on an installment plan, he said.

"We are working very hard to provide a legitimate service," he said, adding that he believes Prodigy has helped many consumers.

He acknowledged there are complaints on the Internet about the firm – both about its  telemarketing calls and sale pitches. The firm is in the process of "revising its intake strategy" as a result, he said.

The trouble with law firms and loan modifications

The California Department of Real Estate recently warned consumers that loan modification scams are continuing to morph. Many states have made it illegal to collect up-front fees for modifications -- but there is an exception for working attorneys. So the newest flavor of loan modification scams involves firms that hire a small number of lawyers who do little or no loan work, but give the company legal cover to collect up-front fees. The agency recently sent cease-and-desist notices to more than 200 California firms engaged in the practice.

"Unfortunately, some loan modification business models have claimed lawyer involvement, but they are just unlawful schemes to avoid the prohibition against the collection of advance fees by a real estate licensee after a Notice of Default is recorded," the agency said in a statement. "In others, lawyers are just a 'front' or non-participating 'magnet' for business from desperate homeowners."

Heyman said Prodigy Law Group is not similar to those described in the California agency's warning, because attorneys in his firm work directly on consumers' cases and provide real assistance to struggling homeowners. Prodigy is not, in fact, on the list of companies that the state told to discontinue offering mortgage services. Tom Pool, spokesman for the California Department of Real Estate, said he could not comment on the firm.

But in general, Todd expressed exasperation at firms that continue to find ways to trick consumers at risk of losing their homes.

"The list grows weekly. The numbers are staggering," he said. "Regulatory action only gets you so far. Some of these people just need to go to jail. ... I am glad this problem is finally getting the attention it deserves."

The California Legislature is considering two bills that would ban up-front fees even for attorneys for loan modification – even for attorneys. But in the meantime, Todd stressed the need for continued consumer education. He also recommended that people in dire straits contact nonprofit, no-fee housing counselors from a list approved by HUD.