FOR IMMEDIATE RELEASE

August 14, 2009

Attorney General Greg Zoeller urges Hoosiers to avoid illegal foreclosure consultants

Zoeller recommends Indiana Foreclosure Prevention Network (1-877-GET-HOPE) for free and certified mortgage counseling

INDIANAPOLIS – A lawsuit filed today against National Foreclosure Consultant Services (NFCS) by Attorney General Greg Zoeller’s Homeowner Protection Unit (HPU) marks Zoeller’s eighth suit against illegal foreclosure consultants since taking office in January. The lawsuit filed in Hamilton County includes 11 consumers from Allen, Hamilton, Johnson and Marion counties and reported losses totaling more than $10,000.

Zoeller’s efforts against illegal foreclosure consultants is fueled by a state-wide initiative to raise awareness among Hoosiers of the availability of free, certified mortgage counseling through the Indiana Foreclosure Prevention Network (IFPN). Homeowners at risk of foreclosure can contact the IFPN at 1-877-GET-HOPE.

“Considering the economic climate we are in, there is zero time to waste on this issue. We are taking an aggressive stand and we won’t wait for more people to be victimized or lose their homes through these illegal practices,” Zoeller said. “There are families in Indiana close to foreclosure and hard choices are being made right now. Illegal foreclosure consultants are not the people we want calling on Hoosiers promising they can save their homes when free, certified mortgage counseling is so easily available.”

Foreclosure consultants claim they can save a home from foreclosure by negotiating or modifying the terms of the homeowner’s existing mortgage. In some cases, the homeowner is directed not to contact their lender during this negotiation process. The lawsuit alleges NFCS did not obtain a necessary $25,000 surety bond to demand payment upfront from their customers. Without the bond, the company is barred from receiving payment until after all services have been performed.

The lawsuit also alleges NFCS failed to register as a business in the state of Indiana. Attorneys general in Florida, Illinois and Minnesota have also filed lawsuits against NFCS citing similar allegations.

The 11 consumer complaints included in the lawsuit allege homeowners were asked by NFCS to pay upfront fees ranging from $950 to more than $3,000 before services would be performed. NFCS failed to modify any of the mortgages for the 11 homeowners. Three of the homeowners were able to negotiate directly with their lenders and modify their own loans. At least one homeowner has filed for bankruptcy and is facing foreclosure.

The IFPN provides a toll-free hotline (1-877-GET-HOPE) which is available to help answer mortgage-related questions for distressed homeowners. For more information on foreclosure-prevention advice through IFPN, visit www.877gethope.org.

“Anyone struggling with their mortgage payments or who may be facing foreclosure should contact the Indiana Foreclosure Prevention Network,” Zoeller emphasized. “I don’t mind sounding like a broken record if it means one more person hears this message and avoids the hazards of hiring a fraudulent foreclosure consultant.”

CASE UPDATES

Of the seven prior lawsuits filed against foreclosure consultant companies, among those cases, three have reached a resolution:

A settlement was reached in June with You Walk Away, Inc., located in California. In exchange for the case being dismissed, You Walk Away agreed to pay $4,000 in restitution to four Indiana consumers and $2,000 to the State for costs and fees.
On June 29, a Delaware County court ordered California-based American Mitigation Group, Inc. to pay $4,064.45 in consumer restitution payments to five Indiana consumers and $33,000 to the State for civil penalties.
On July 27, a Marion County Superior Court ordered Foreclosure Relief Agency, LLC. to pay $53,002.34 in consumer restitution to 52 Indiana consumers and $2 million in civil penalties to the State of Indiana.

Zoeller extended his appreciation to Deputy Attorney General Myron Rahn, III and the HPU for their passion and dedication to protecting the rights of homeowners and responding to and investigating consumer complaints against foreclosure consultants.

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Link to court documents:

Complaint - Filed in Hamilton County Superior Court 3, August 14, 2009

Summons - Filed in Hamilton County Superior Court 3, August 14, 2009