February 8, 2008 – Raleigh: A Florida company that took struggling homeowners’ money but did little or nothing to help them fight foreclosure has been ordered to stop, Attorney General Roy Cooper said today.
“Families facing foreclosure need real help, not expensive schemes that drive them further into debt,” said Cooper. “People should call North Carolina’s free hotline and avoid losing their hard-earned money to scams.”
North Carolinians can call 888-995-HOPE for free counseling on options to prevent unnecessary foreclosure.
Cooper contends that foreclosure assistance scheme Fresh Start took homeowners’ money but did little or nothing to help them. He filed suit this week against Mortgage Assistance Solutions, LLC, which does business as Fresh Start. Fresh Start has an office in Clearwater, Florida, although its manager, Michael Thomas Stoller, resides in Beverly Hills, California.
Wake County Superior Court Judge Robert Hobgood today agreed with Cooper’s request to stop Fresh Start’s foreclosure assistance operations in North Carolina and ordered the company to turn over records on all North Carolina customers within ten days. Under North Carolina law, it’s illegal to charge an upfront fee for foreclosure assistance.
Cooper has asked the court to permanently bar Fresh Start from offering foreclosure assistance in North Carolina and to make sure any money Fresh Start took from North Carolinians goes back to consumers or to pay their mortgage.
As alleged in Cooper’s complaint, Fresh Start contacted North Carolina homeowners who were facing foreclosure by mail promising “to immediately pay all the money your mortgage company is currently demanding.” Homeowners who called were told that Fresh Start had saved many homes from foreclosure and would negotiate with their lenders and help them get a new loan. Consumers who signed up for the service paid Fresh Start $1,200 to $1,400 and were told not to contact their mortgage lender on their own. In reality, Fresh Start did little or nothing to help homeowners resolve foreclosure and get new loans.
Five North Carolina homeowners have complained to Cooper’s Consumer Protection Division about Fresh Start. One Wilmington man paid $1,200 for help and was told that someone had been “assigned to his case” and was promised that Fresh Start “would handle everything” to help him keep his home. Finally, after getting no help from Fresh Start and with the foreclosure sale of his house fast approaching, the homeowner turned to a private attorney who was able to stop the foreclosure. Another North Carolina homeowner paid Fresh Start $1,300 to have her loan reinstated and stop foreclosure on her house in Mocksville. She later learned that Fresh Start had never contacted her mortgage lender as promised. After getting no help from Fresh Start, she was able to work out a solution with the lender on her own.
“Foreclosures are on the rise and many families don’t know where to turn for help,” said Cooper. “Instead of paying an upfront fee for foreclosure assistance, call the HOPE hotline for free help.”
The toll-free hotline, 888-995-HOPE is available 24 hours a day, seven days a week and will connect callers with nonprofit counselors in their local community.