FTC Charges Foreclosure Prevention and Loan Modification Marketers with Contempt
The Federal Trade Commission has filed a civil contempt action charging a deceptive mortgage foreclosure rescue and loan modification operation with violating a 2001 court order. Many homeowners paid the defendants up to $5,500 in advance and ultimately lost their homes to foreclosure. The FTC has asked the court to halt the unlawful practices, freeze the defendants’ assets, and seek compensation for victims.
According to papers the FTC filed with the court, the defendants told consumers that they would stop foreclosures. They claimed they were “100% successful and had never lost a customer’s home to foreclosure” and advised consumers to pay them instead of making mortgage payments. They also claimed that they would negotiate modified mortgages with lower interest rates, monthly payments, and principal balances. The FTC charged that, in fact, they obtained few, if any, loan modifications for customers.
Attorney General Sues Orlando Loan Modification Company for Foreclosure Fraud
TALLAHASSEE, FL – Attorney General Bill McCollum today announced that his office has filed a lawsuit against an Orlando loan modification company alleging the company was committing foreclosure rescue fraud. Three Angels Community Action Network and company president Sherrard A. Haugabrooks are named in the lawsuit filed today in Seminole County Circuit Court. The lawsuit specifically alleges violations of Florida’s Foreclosure Rescue Law, §501.1377.
Members of the Attorney General’s Economic Crimes Division, working as part of the Attorney General’s Mortgage Fraud Task Force, began investigating Three Angels Community Action Network in February 2009. The company allegedly charged homeowners an up-front fee generally equal to a monthly mortgage payment prior to providing loan modification services. The lawsuit further states the company’s client contracts did not contain the contractual disclosures required by Florida’s Foreclosure Rescue Law, a 2008 legislative priority of the Attorney General.