21 Mortgage Debt Relief Companies Sued

 The following lawsuits have been filed in Orange County and U.S. District Court for the Central District (Los Angeles):

– U.S. Homeowners Assistance, based in Irvine;
– U.S. Foreclosure Relief Corp and its legal affiliate Adrian Pomery, based in the City of Orange;
– Home Relief Services, LLC, with offices in Irvine, Newport Beach and Anaheim, and its legal affiliate, the Diener Law Firm;
– RMR Group Loss Mitigation, LLC and its legal affiliates Shippey & Associates and Arthur Aldridge. RMR Group has offices in Newport Beach, City of Orange, Huntington Beach, Corona, and Fresno; and
– United First, Inc, and its lawyer affiliate Mitchell Roth, based in Los Angeles.”

Article:

Foreclosure jump in first half of 2009

“Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday.

The number of properties drawing filings, which include notices of default and auctions, jumped 9.0 percent from the second half of 2008 and almost 15 percent from the first half of last year.”

Article:

FTC targets scams aimed at Spanish speakers

“The Federal Trade Commission has charged a mortgage foreclosure “rescue” operation with falsely promising Spanish-speaking consumers who are behind on their mortgage payments that it would stop foreclosure. Many people who paid the defendants ultimately lost their homes, and others avoided foreclosure only through their own efforts. At the FTC’s request, a federal court temporarily halted the defendants’ practices and froze their assets. The FTC seeks to stop the deceptive claims and obtain consumer redress from the defendants, whom consumers have paid at least $3.3 million.”

Article:

Foreclosure websites order to close down

“In North Dakota, ForeclosureTown.com lists 853 properties in the Bismarck, North Dakota area and 675 properties in the Fargo, North Dakota area that it claims are in foreclosure. The pictures listed are not the actual pictures of the properties. According to North Dakota Attorney General Wayne Stenehjem, who made the announcement, the website listings are merely a ruse to sell memberships for a free 7-day trial period wherein consumers’ bank accounts or credit cards are automatically charged. Consumers cannot access any of the listings until they have purchased a membership. The entity also tries to enroll consumers in a “foreclosure school” for $297.”

I receive questions from victims of various scams or suspected scam about what they should do.  This article suggests the answer; start with your state’s attorney general’s office.  They are invested with the power to investigate consumer fraud.

Article:

FTC announces loan modification crackdown

This weekend I saw my first loan modification infomercial.  My first thought is are all those services scams?  By that I mean, is the very notion of handing money over to a third party in hopes that they can do better than you in getting your debt paid, a losing proposition?

Meanwhile the FTC is suing a bunch of these services because their ads make them sound like they are sponsored by the federal government;  Federal Loan Modification Law Center and Bailout.hud-gov.us. 

The FTC is also sending out warning letters to 71 more services based on potentially deceptive ads which make the following types of claims; These advertisements contain potentially deceptive claims, touting guaranteed results, success rates of over 90 percent, and claiming affiliation with homeowners’ lenders, with the HOPE NOW Alliance, or with federal government programs.

FTC news release:

Virginia FBI focusing on foreclosure scams

Stating that foreclosure scams are up considerably in the last few year, Alex Turner of the Virginia FBI is saying that the law enforcement agency is shifting its resources to fight these activities in the state.

Home Equity Theft Blog

Ohio suing foreclosure services for fraud

I’ve posted about these scams before  here.  This one  involves Ohio companies Foreclosure Assistance USA and American Foreclosure Professionals, Inc.  Ohio Attorney General filed suit against them in Hamilton County Ohio, home to lots of foreclosures. 

Like others  such services, according to the complaint these services claim to intercede on behalf of a beleagured homeowner to handle the threatened foreclosure  and allow the homeowner to stay in their home.  Meanwhile, the homeowner is told not to contact the lender but then the service they have hired waits weeks before contacting lender and sometimes doesn’t bother to contact them at all. 

Complaint courtesy Courthousenews

Ohio AG cracked down on forclosure rescue scam

The Attorney General asked an Ohio state court to shut down “Please Save My Home” (tacky, tacky name) for offering help to mortgage holders for $650 but it turns out they did nothing for the money.

The comments to this article weren’t very sympathetic to scam victims.  One person provided a link to the Ohio Housing Finance Agency (OHFA) Opportunity Loan Refinance Program.  But think about it, you are unemployed or depressed or both, sitting at home watching advertising that promises to solve all your woes, wouldn’t it be tempting to give them a call if your house was on the line?   I won’t judge people who try these scams.  I’m glad the AGs are stepping in to help out.

Behind foreclosure scams

With increasing millions of households owing more on their mortgage than their house is worth and with unemployment skyrocketing, there are a lot of desperate people out there.   This post from Creditslip provides the context for the foreclosure scams.  

If homeowners could quickly actually reach a live loan servicer within a few minutes, then these scams would have less appeal.  They could work something out with the servicer but that isn’t happening.  Instead homeowners are thrown into voicemail hell and they are already feeling  rising panic and dread.  Along comes smooth talking foreclosure servicers who promptly pick up the phone and calm callers with visions of all being well once they fork over a thousand dollars or more.

However, this is just ruse I we see here.

Update: Foreclosure rescue scams

I just came across a useful blog entry that address the legal issues involved in type of suit I mentioned earlier here.

It appears from “The Lead Counsel Corner” that these scams are being monitor carefully by the FTC.  I hope the Illinois AG is working with them and other AGs to prevent the worst abuse of this sort from happening.