More and more states are filing lawsuits against foreclosure rescue companies and mortgage companies for violations of various new laws aimed at protecting consumers from deceptive business practices. Here are some of the latest to be filed:
• Missouri Attorney General Chris Koster sued Oxford Lending Group based in Columbia, Mo., and Gold Star Home Mortgage based in Columbus, Ohio, for allegedly misleading consumers through direct mail marketing techniques by representing themselves as from the homeowner’s bank or the government. Koster also recently sued Anaheim, Calif.-based U.S. Foreclosure Relief for allegedly defrauding local homeowners looking to avoid foreclosure.
• Indiana Attorney General Greg Zoeller filed suit against five foreclosure consultant firms for collecting fees in exchange for promises to help homeowners avoid foreclosure. The defendant companies are Foreclosure Assistance, LLC, Scottsdale, Ariz.; Homeownership Preservation Group, LLC (aka Stop Foreclosure Save My Home), Melbourne, Fla.; You Walk Away, LLC, Carlsbad, Calif.; American Mitigation Group, Inc., Del Mar, Calif.; and Foreclosure Relief Agency, LLC, Monarch Beach, Calif.
• Florida Attorney General Bill McCollum was granted a court order temporarily halting National Foreclosure Counseling Services Corp., from charging consumers upfront retainer fees, which allegedly averaged $1,800, and a $200 processing fee for foreclosure-related rescue services such as loan modifications. The suit against the Jacksonville-based firm alleges that the company sent out marketing letters stating that the consumer had been selected for special programs by “Government Insured Institutions.”
• Massachusetts Attorney General Martha Coakley has settled a suit against Express Modifications, Inc. and its owner David J. Gotterup for the use of deceptive advertising practices. Under terms of the settlement, defendants must pay $7,300 in restitution and $25,000 in civil penalties. Any further violations of the state Consumer Protection Act by the defendants would result in the imposition of an additional $25,000 civil penalty.
• Texas Attorney General Greg Abbott has filed a lawsuit against two mortgage rescue companies, alleging the firms took money from financially distressed homeowners, promising to help them with their mortgages, and then doing nothing. The suit names Excel Loss Mitigation, Inc. of Houston, United Servicing LLC, and some related assets held by Bell Investments & Developments LLC. Also named are company directors Frank Bell, David Bell and David Espy, according to the Associated Press. Abbott’s office seeks restitution for victims and civil penalties up to $20,000 per violation of the state’s Deceptive Trade Practices Act.
Source: Foreclosure News Report