Rise in foreclosure scams calls for national crackdown, says AG Cooper

Washington, DC - September 17, 2009 - (RealEstateRama) — Foreclosure rescue scams are pushing more struggling homeowners deeper into debt, and state and federal law enforcement must work together to stop them, Attorney General Roy Cooper told officials in Washington on Thursday.

Cooper met with US Treasury Secretary Tim Geithner, US Attorney General Eric Holder, Housing and Urban Development Secretary Shaun Donovan, Federal Trade Commission Chairman Jon Leibowitz and 11 other state attorneys general today to discuss ways to fight foreclosure and loan modification scams.

“Foreclosure scams cost homeowners time and money, two things you can’t afford to lose when you’re fighting to save your home,” Cooper said. “In North Carolina, we’re cracking down on foreclosure scammers who take homeowners’ money but do little or nothing to help them.”

Many North Carolina homeowners are worried about losing their homes, and scammers are trying to take advantage of them. Complaints to Cooper’s office about foreclosure scams are up dramatically. In 2007, seven consumers complained to the Attorney General’s Consumer Protection Division about foreclosure scams. The number of complaints rose to 82 in 2008, and to 353 so far in 2009.

In 2005, Cooper helped win a state law that makes it illegal to charge an upfront fee for foreclosure assistance in North Carolina. North Carolina was one of the first states in the nation to adopt such a law. Cooper today urged FTC officials to put a national ban in place on upfront fees for foreclosure help, and also encouraged the US Department of Justice to ramp up criminal prosecutions of these scams.
Cooper and his Consumer Protection team have used North Carolina’s law to take action against more than 130 foreclosure assistance scams since January of 2008, winning judgments worth close to $1 million from scammers and recovering more than $100,000 in refunds for consumers.

“Never, ever pay money upfront to anyone who claims they’ll help you with foreclosure,” Cooper said. “Real help is available for free from qualified non-profit counselors.”

North Carolina homeowners can call a toll-free hotline set up by the NC Commissioner of Banks’ Office for free counseling on options to avoid foreclosure. The hotline, 1-866-234-4857, is available from 8:00 AM to 9:00 PM Monday through Friday, and from 8:00 AM to 5:00 PM on Saturdays.

Tips on how to spot a foreclosure scam are available on the Attorney General’s website, www.ncdoj.gov.

A summary of recent North Carolina cases against foreclosure scams:

Mortgage Assistance of the Carolinas and Alan Steve Seabolt (2006)
 This Charlotte company targeted distressed homeowners with promises of special expertise in rescuing homes from foreclosure, collecting an upfront fee but doing little or nothing to help consumers save their homes.  Cooper filed suit against Seabolt and his company in August 2006.  In September 2007, the court entered a default judgment and permanent injunction against the defendants, barring them from engaging in any foreclosure assistance or related services in North Carolina and ordering them to pay $105,000.

Mortgage Assistance Solutions, LLC, doing business as Fresh Start, and Michael Thomas Stoller
Fresh Start contacted North Carolina homeowners facing foreclosure and told them that they would negotiate with their lenders and help them get a new loan in exchange for an upfront fee of $1,200 to $1,400.  In February 2008, Cooper won a court order barring the Florida company and its Beverly Hills-based manager from conducting foreclosure assistance services in North Carolina. In May of 2008, the court imposed a permanent injunction on the defendants. The company is no longer doing business in North Carolina.

Alphin Marketing Group, Inc., Alphin Group, Inc., and Russell E. Alphin
The Alphin Group targeted distressed homeowners with false offers to help save them from foreclosure.  In May 2008, Cooper won a court order to stop the defendants from taking consumers’ money.  In May 2009, the Attorney General won a permanent injunction to bar the company from offering foreclosure assistance and debt adjusting services in North Carolina and a monetary judgment of $30,000.

• Robert E. Cassell, Jr., doing business as American Mortgage Assistance (2008)
• Home Assure, LLC and its vice president Michael Grieco (2008)
• Metrolina Mortgage Relief, LLC and its president Jeffery Mika (2008)

In October 2008, Cooper took action against these three Charlotte area foreclosure rescue companies that charged homeowners facing foreclosure high fees but failed to save their homes.  The firms are currently barred from offering foreclosure services in NC.  In May of 2009, the Attorney General won a permanent injunction and judgment worth $10,000 against Metrolina. In July 2009, the Attorney General won a permanent injunction and judgments worth more than $147,000 against Grieco and Home Assure.  

• Mortgage Help Services and Nathaniel Livingston (2009)

In June of 2009, Cooper won a court order to stop Mortgage Help Services Inc. of Raleigh and its CEO from advertising, performing or taking money for loan modification and foreclosure assistance services. The company advertised on local TV stations and Christian radio stations that its experts could rescue homes from foreclosure, but homeowners who paid between $500 and $1,500 upfront got little or no help.

• Peoples First Financial (2009)
• 21^st Century Legal Services (2009)

In July of 2009, Cooper joined federal officials and attorneys general from 17 other states to crack down on foreclosure scammers nationwide. Cooper filed suit against two California companies, Peoples First Financial and 21^st Century Legal Services, that promised to help North Carolinians negotiate lower mortgage payments and save their homes from foreclosure. Both companies took money upfront and did little or nothing to help homeowners. A North Carolina court agreed with Cooper’s request to bar the companies from doing business with North Carolina consumers.

Contact:  Noelle Talley (919) 716-6413

 

 

 

 

USGBC - U.S. Green Building Council

HUD - U.S. Department of Housing and Urban Development

NAR - National Association of REALTOR

RealtyTrac

FHFA - Federal Housing Finance Agency

Freddie Mac

MBA - Mortgage Bankers Association