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Deanna Reade was in a financial pickle.

She and her husband were underwater on their Windsor house when the payments jumped on their interest-only loan by $1,000 a month.

On the advice of a friend, Reade turned to Petaluma-based Mortgage Modifiers Inc., in the hope of getting a chunk of her debt forgiven and restructuring the loans on her house and an investment condo to make them more affordable.

But months after paying the company two upfront fees totaling nearly $4,000, nothing had happened, she said. And the banks said they were unaware of any effort to refinance.

So Reade confronted the company's owner, Miguel Angel Lopez-Soleta, who agreed to a refund. He sent her two checks but they both bounced, she said.

That's when Reade concluded she had been ripped off.

"He's a scammer," said Reade, an office accountant. "He got our hopes up and now they are down the toilet."

Reade isn't alone.

The state Department of Justice estimates more than 50 people across the Bay Area may have been defrauded by Lopez-Soleta, 41, and his company, Mortgage Modifiers.

Nine lawsuits have been filed against Mortgage Modifiers in small claims court, according to court records.

An investigation is underway into allegations that Lopez-Soleta failed to deliver on promises to negotiate directly with banks on behalf of people in financial distress, Department of Justice spokeswoman Michelle Gregory said.

Agents raided his home and offices last week, seizing files and computer hard-drives.

Lopez-Soleta has not been charged, she said.

Also, the state is looking into claims that he broke the law by requiring advance fees of $1,995 to perform loan modifications, and was operating with a revoked real estate license, Gregory said.

Collection of advance fees was outlawed in 2009 with the passage of SB94.

The case came to light as the state continues to recover from a historic housing slump. Over the past six years, more than 14,000 homes in Sonoma County were surrendered by their owners, through either foreclosure or short sales. That amounts to roughly one out of every seven county homes with a mortgage.

"People who want to hang onto their homes are desperate," Gregory said. "Unfortunately, you have these predators out there."

Lopez-Soleta didn't return repeated calls this week to his Ormsby Lane home. He has claimed that he made no promises to clients, but instead provided them with educational information they could use to do their own loan modifications.

In court documents, he said he stopped dealing directly with lenders after the law changed.

But people who claim to be his victims say that's not true.

Lisa Marvier of Novato, who also was underwater on her home, said Lopez-Soleta promised to help her last summer, reducing her principal and interest rate in a plan that sounded too good to be true.

"He said, 'I'll do all this,'" she said. "We were elated. He's a smooth talker."

She said she plunked down her $1,995 and waited. Months went by. Lopez-Soleta assured her in numerous phone calls that the reduction was in the works or in final approval stage, she said. He even advised her to hold off on paying her property taxes, she said.

Then one day in January she received a default notice in the mail. It turned out nothing had been done, she said.

"It was all a lie," she said. "There was never a single person at Wells Fargo that he had spoken with. It was a made-up illusion."

Her story is similar to others swirling around the Internet. The Yelp page for Mortgage Modifiers contains numerous warnings of fraud. Some worry the company has sensitive personal information from them, like Social Security numbers and bank accounts, that could compromised.

Others urge people to call police while a few express satisfaction in the work that was done.

"Do not TRUST these guys!" wrote one commenter who identified herself as Maribel B. of Petaluma. "They are just taking money from people. He takes the money and QUITS answering your phone calls."

Court documents show Lopez-Soleta's real estate license was revoked in August for professional misconduct, including collection of advance fees.

He first became licensed in 1993 and opened Mortgage Modifiers in offices on Baywood Drive in 2008. In a six-month period in 2010, the company closed from three to five $1,995 deals per week, the documents said.