• 05
  • May
    2011

According to the state Attorney General's office, Florida homeowners trying to keep mortgage lenders from foreclosing on their properties are being gouged by so-called foreclosure rescue firms. Three companies that reportedly promised to help Floridians modify mortgage terms or avoid home foreclosures were charged with taking money from clients and doing nothing to help them.

Homeowner Protection Economics, DC Financial Group and Deleverage America have been accused of illegally charging up-front fees of $495 to $2000 for lender-negotiated loan modifications and home-foreclosure mitigations.

According to Consumer Affairs, the complaint alleges the companies never even tried to contact mortgage lenders or to provide the services they claimed. The accused companies had used media blitzes to advertise that they were able to work with lenders to lessen the debt-load of homeowners and to fend off property foreclosures -- promises they allegedly never kept.

It is against the law for companies to charge up-front fees for the types of services that these organizations are accused by the state Attorney General of offering. A Palm Beach County Circuit judge has frozen the companies' assets and barred them from doing any business while the state's lawsuits are pending.

State prosecutors have filed lawsuits that demand the foreclosure-rescue firms reimburse homeowners and the state's legal costs. The suit also requests that the companies pay civil penalties of $15,000 for each instance of fraud under the Foreclosure Fraud Prevention Act. Authorities say that U.S. states hardest hit by the decline in the real estate market are the ones most preyed upon by fake foreclosure-rescue firms.

Source:

Florida Sues Three Foreclosure Rescue Firms (Consumer Affairs)