Beware of Foreclosure Rescue Services

Most homeowners would do just about anything to avoid foreclosure. Scammers and con artists know this. The level of desperation simply attracts predators.

Just last month, a legal action was filed against companies offering so-called mortgage foreclosure rescue services. MVP Home Solutions LLC and its associated entities targeted homeowners drowning in mortgage debt and charged them up to $1625 a month for debt adjustment, foreclosure consulting and other services. Though promised, these services were never delivered. Victims were diverting money that could have gone to their mortgage loan, leaving them worse off than when they started.

Just to provide further proof of the seriousness of the matter, the plaintiffs in this case include state Attorney General Christopher S. Porrino, Division of Consumer Affairs Director Steve C. Lee and the Department of Banking and Insurance Commissioner Richard J. Badolato. The defendants are accused of violating the Consumer Fraud Act, Advertising Regulations, the Debt Adjuster Act, the Foreclosure Rescue Fraud Prevention Act, the Foreclosure Consultant Regulations, the Financial Institutions’ Advertising Act and the Financial Institutions’ Advertising Regulations.

Just what are these mortgage foreclosure rescue services? According to the Complaint, the defendants defrauded consumers via three programs:

• “Stay in Your Home” Monthly payments ranged from $995 to $1625. Services included purchasing mortgage notes at a discount and providing a new, lower-cost mortgage loan. There were also claims of legal defenses and forensic tactics.
• “Walk Away Free & Clear” Monthly payments ranged from $995 to $1625. This program was simply an offer of legal defenses and negotiating the sale of the homeowner’s home.
• “Stop the Sale Date” Monthly payments were $995 after being charged a signing fee of $1095. For up to two years, the fraudsters simply promised to halt the imminent foreclosure sale date.

Mortgage lenders never received anything more than a “cease and desist” letter. Meanwhile, the con artists were promising legal defenses, forensic accounting tools and the ability to delay foreclosure proceedings or reduce mortgage loan debt. The actual list of transgressions in the Complaint included but were not limited to the following:

• Failure to fully inform consumers about the programs.
• Falsely presenting themselves as advisors or consultants capable of acting on the consumers’ behalf and providing foreclosure rescue-related services.
• Failing to obtain credit reports and evaluate consumers’ financial obligations after obtaining Credit Report Authorizations and Privacy Disclosure Forms from consumers.
• Falsely advertising that despite collecting monthly payments, they “do not realize a profit until they are successful.”
• Falsely claiming that their systems will save “tens of thousands of dollars that would have gone to monthly rent payments, rent deposits and moving costs.”
• Filing a bankruptcy proceeding on behalf of the consumer without the consumer’s knowledge or consent.

According to the Complaint, only those licensed by the Department of Banking and Insurance can act as Debt Adjusters or Foreclosure Consultants and provide mortgage loan relief services. If you are wrestling with any kind of debt, you may find yourself desperately seeking a solution. Do not let that lead you into the hands of scam artists like the ones described here. Schedule a consultation with a consumer law attorney instead and discuss your legal options.