In state after state, attorneys general are cracking down on foreclosure rescue firms that promise to save consumers' homes but usually just end up charging hefty fees, or worse.
Indiana is one of the latest states to take action, with Attorney General Greg Zoeller filing suit against PFS Financial Corp. (PFS), a California-based foreclosure rescue company that claimed their "experienced team of mitigation experts" would reach a solution that satisfied both the lender and the homeowner.
The lawsuit alleges PFS violated Indiana's consumer protection laws when it collected $1,000 from a Corydon, Ind., homeowner before performing any services. Indiana law requires credit services organizations and foreclosure consultants to have a $25,000 surety bond in order to collect 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.
"These for-profit companies prey on people's desperation with claims that are too good to be true; that they can save your home and keep you out of foreclosure. The reality is they are operating deceptively and illegally in Indiana and are failing to perform the services they advertise," Zoeller said.
In the last three months, the Indiana Attorney General's Office has filed lawsuits against or reached settlements with 15 foreclosure consultants from around the nation. Homeowners looking to avoid foreclosure are encouraged to work with a certified not-for-profit housing counselor to determine their available options. Call the Indiana Foreclosure Prevention Network at 1-877-GET-HOPE for more information.
