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The Scoop

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Verbatim: Indiana sues foreclosure consultants

Statement issued Thursday:

FORT WAYNE, Ind. – Many homeowners facing foreclosure who are frustrated with their loan servicers turn to for-profit foreclosure consultants whose advertisements often promise any home can be saved from foreclosure and their services are 100% guaranteed. Indiana Attorney General Greg Zoeller today announced the filing of 10 lawsuits against companies making such claims calling them false and illegal. One such complaint was filed today in Allen County against Colonial Financial Solutions, headquartered in New Jersey.

“These so-called ‘foreclosure consultants’ are taking advantage of Hoosiers who are facing desperate financial hardships and scamming them out of thousands of dollars. They are operating illegally and this will not be tolerated in Indiana,” Zoeller said. “Working to protect Hoosier consumers includes bringing actions against those who violate our state laws and also warning people to protect themselves, their family and their neighbors – don’t let a loved one fall victim to these scams, no matter how convinced they may be of their legitimacy.”

The lawsuits were filed in nine different Indiana counties by Zoeller and his team of deputy attorneys general serving in the Homeowner Protection Unit. The coordinated filing was done in an effort to raise awareness of the pitfalls of hiring for-profit foreclosure rescue companies. The complaints were filed against the following companies:

County of filing, Defendant name, Location of Defendant

Allen, Colonial Financial Solutions, New Jersey

Clay, Pierce, Taylor, & Budrow, Florida

Clinton, American Lending Review, California

Elkhart, National Future Mortgage, New Jersey

Johnson, Oceanview Investment Services, Florida

Johnson, US Homeowners Relief, California

Knox, Integrated Financial Solutions, New Jersey

Lake, Meridian Law Center, California

Marion, Manhattan Mitigation, New York

Shelby, Fair Lending Review, Nevada

The lawsuit filed in Johnson County against US Homeowners Relief states that in December 2008, Ronalee Sims, a resident of Greenwood, Ind., paid Oceanview Investment Services $1,895 to modify her home loan to stop foreclosure. Oceanview advertised on their website a money back guarantee, stating:

“…if we are unable to give you a successful action plan that improves your situation or gives you a viable strategy to avoid or stop foreclosure, we will refund 100% of your money. No questions asked! You have nothing to lose!”

Sims lost her home in a sheriff’s sale in January 2009 and her money has not been refunded.

The Federal Trade Commission announced a new rule Wednesday prohibiting debt relief organizations from collecting upfront or advance fees for services that have not been performed. The rule takes effect on October 27 and will be an additional enforcement measure Zoeller will consider taking to stop illegal foreclosure consultants.

“I applaud the FTC’s efforts to protect consumers with this new prohibition on advance fees and we will continue to work closely with other state and federal agencies to enforce laws designed to protect consumers.”

To date in 2010, the Indiana Attorney General’s Office has filed lawsuits against or reached settlements with 27 foreclosure consultants located in states around nation.

Homeowners looking to avoid foreclosure are encouraged to work with a certified nonprofit housing counselor to determine their available options. Call the Indiana Foreclosure Prevention Network at 1.877.GET.HOPE for more information or visit the Attorney General’s consumer protection website www.IndianaConsumer.com to learn more about homeowners’ rights in Indiana.

Send items for The Scoop to jgnews@jg.net.

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