Foreclosure assistance scheme banned from NC, announces AG Cooper
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Foreclosure assistance scheme banned from NC, announces AG Cooper

AG urges consumers to seek free foreclosure help instead

Raleigh, NC – January 26, 2011 – (RealEstateRama) — A California foreclosure assistance company is the latest outfit to be banned from offering loan modification and foreclosure assistance services in North Carolina, Attorney General Roy Cooper said today.

“Foreclosure assistance schemes take money out of the economy and push homeowners deeper into debt,” Cooper said. “Homeowners often lose their homes and end up paying thousands of dollars for help that never comes.”

This week, Wake County Superior Court Judge Abraham Penn Jones granted Cooper’s request for a default judgment against Peoples First Financial, Inc., which permanently bans the California company from performing or offering foreclosure assistance, loan modification and debt relief services in the state. The judgment also orders Peoples First Financial to pay $9,497.50 in refunds to consumers and $25,000 in civil penalties to local public schools.

This is the thirteenth case won by Cooper’s Consumer Protection Division against foreclosure assistance and loan modification scams in the past five years and the second such win so far in 2011.

Cooper’s Consumer Protection Division was first alerted to Peoples First Financial in early 2009 after hearing from consumers who paid a $2,495 upfront fee for loan modification services they never received.  Cooper then filed suit against the company, alleging it charged homeowners an advance fee for loan modification which is illegal under North Carolina law. Shortly after the suit was filed, People First Financial shut down its operations and went out of business.

Cooper reminds consumers facing foreclosure to keep the following tips in mind to avoid scams and frauds:

  • Beware of so-called foreclosure assistance or rescue companies that require payment up front before they “help” you. It’s illegal to charge an upfront fee for foreclosure assistance services in North Carolina.
  • Steer clear of foreclosure assistance or rescue companies that want you to make your mortgage payment to them, or who tell you not to talk to your mortgage company or to an attorney.
  • Watch out for so-called real estate investors, who promise to pay off your mortgage if you sign over the deed to your property, but not the mortgage.  The investor then rents your home back to you or to a tenant but doesn’t make mortgage payments and the bank forecloses.  Remember, just signing over your deed doesn’t get you out of the responsibility for paying your mortgage.
  • Other scam tip offs: the schemer refuses to put his or her promises in writing, pressures you to sign paperwork you haven’t had a chance to read thoroughly, or offers to fill out the paperwork for you.
  • If you get behind on your mortgage payments, contact your lender immediately.  Most banks and mortgage lenders do not want to foreclose because they lose money on foreclosure sales.  Even if you are delinquent, many lenders will be willing to offer a temporary forbearance or a loan modification to avoid foreclosure.
  • Get free, reputable help instead. Rather than paying for foreclosure assistance, call the toll-free hotline set up by the NC Commissioner of Banks’ Office for free help. 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.

“Scammers undermine the good work being done by legitimate housing counselors to help families keep their homes,” Cooper said. “There’s real help for available for free for North Carolina homeowners who want options to avoid foreclosure.”

Consumers who suspect fraud by a foreclosure rescue company should call the Attorney General’s Consumer Protection Division toll-free at 1-877-5-NO-SCAM or file a consumer complaint online.

Contact:  Noelle Talley, (919) 716-6413

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