July 1, 2009
Ohio is among the states that is trying to put foreclosure rescue scams out of business. Ohio Attorney General Richard Cordray has filed lawsuits against three operations - 21st Century Legal Services, Foreclosure Home Assistance, LLC, and Michael Brotherton, who does business as Financial Emergency, Inc.
"Ohio has zero tolerance for these predators," Cordray said. "They prey on Ohioans who are vulnerable and are seeking answers during desperate times. We issued warnings last month ordering them to stop their illegal practices, but they continued anyway. Now, we will work through the courts to stop them permanently."
According to Cordray's lawsuit, Cleveland-based Foreclosure Home Assistance, LLC charged consumers $1,500 for loan modifications, forbearance plans and other foreclosure prevention services. In some cases, the company offered foreclosure protection to tenants, claiming it could transfer the property deed from the landlord to the tenant. Despite its promises, the company failed to deliver.
Michael Brotherton, operating as Financial Emergency, Inc., offered similar foreclosure prevention services in Greene County. According to Cordray's lawsuit, Brotherton advertised his services on the Internet and through the mail. Brotherton charged consumers up to $1,269, saying he could work with lenders and creditors to negotiate debt settlements or workout agreements with mortgage holders. Brotherton failed to deliver.
Also failing to deliver was 21st Century Legal Services, which promised to help homeowners restructure their home loans, a promised service for which they charged $1,500 to $2,600. According to the lawsuit, the company instructed consumers to stop making payments on their home loans and to stop contacting their lenders.
Consumers were instructed to make out several post-dated checks, each approximately equal to their monthly mortgage payment, and believed 21st Century would take care of the rest.
Cordray's lawsuits charge each company with violations of Ohio's Consumer Sales Practices Act and Debt Adjusters Act. Cordray asks the court to hold the companies responsible for reimbursing consumers and to assess a $25,000 civil penalty for each violation.
"In all three of these cases, we believe more victims are out there," said Cordray.
