DANVILLE, Ind. - Indiana Attorney General Greg Zoeller visited Hendricks County today and filed a complaint against Legal Home Loan Solutions, a for-profit Florida foreclosure consultant company that operated illegally in 15 Indiana counties and failed to provide refunds to customers after services were not provided.
"Foreclosure consultant scams prey on those who are desperately looking for help to save their homes. These scams also rob the homeowners of the opportunity to receive legitimate housing services from not-for-profit alternatives," Zoeller said. "The Attorney General's Office wants to make the public aware of these frauds and provide information about the help available."
In addition to Legal Home Loan Solutions, three other entities were named as defendants in this case: Federal Home Loan Solutions, Matevia Law Firm and Thomas C. Matevia, the owner of all three companies, also have been named in the lawsuit. The Attorney General filed the case today in Hendricks County Court.
Legal Home Loan Solutions violated Indiana's consumer protection laws when it collected thousands of dollars from Indiana homeowners before performing any services, according to the lawsuit.
Indiana law requires credit service organizations and foreclosure consultants to register a $25,000 surety bond with the Attorney General's Office prior to performing any services as a foreclosure consultant, including collecting money upfront. The bond acts as an insurance policy for consumers in the event the company fails to perform the services and does not provide a refund.
The company also committed other violations of the Credit Services Organization Act, the Mortgage Rescue Protection Act and Deceptive Consumer Sales Act, by failing to provide the homeowner with notice of various legal rights or of the availability of nonprofit credit counseling, among other things.
The lawsuit lists 21 other victims located in Allen, Cass, Clark, Elkhart, Floyd, Grant, Hamilton, Hendricks, Lake, Marion, Monroe, Porter, Steuben, St. Joseph and Tippecanoe counties.
More than 500 investigations have been opened concerning foreclosure consultants by the Attorney General's Homeowner Protection Unit (HPU) since the beginning of 2009. The HPU investigates and pursues violations of Indiana's laws governing the activities of foreclosure consultants, as well as real estate appraisers, real estate licensees, and mortgage fraud. More than two dozen lawsuits have been filed by the Attorney General against foreclosure consultants in the past year.
Foreclosure consultants have several methods for targeting their victims. They reach people through the Internet - creating sophisticated websites complete with testimonials and reputable-sounding endorsements.
Advertisements for their services can be found online, in newspapers and on television. Often they will check local foreclosure filing notices -- this is a public record -- and target those homeowners whose lenders have recently filed a foreclosure notice. Sometimes they go door-to-door in neighborhoods known to have been affected by unemployment and the weak economy.
The lawsuit filed today seeks restitution for the consumers, civil penalties of up to $5,000 per violation that would be paid into the Consumer Protection Assistance Fund and attorneys' fees.
In response to fraud committed by so-called foreclosure consultants that operate illegally in Indiana and other types of fraud within the mortgage industry that victimized borrowers, the Indiana General Assembly in 2009 and 2010 passed new laws to crack down on foreclosure abuses. Zoeller supported and recommended the new legislation.
Zoeller noted that distressed homeowners at risk of foreclosure need not pay a large fee to a for-profit company when advice on avoiding foreclosure is available for free from the Indiana Foreclosure Prevention Network (IFPN) at 1-877-GET-HOPE. Hoosiers who believe they have been a victim in a foreclosure consultant scam can file a complaint with the Attorney General's Consumer Protection Division online - http://www.indianaconsumer.com/ - or by calling 1-800-382-5516.
NOTE: A copy of the lawsuit the Attorney General filed in Hendricks County Court is at this link.
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