The state of Ohio has filed three new lawsuits against foreclosure rescue operations, charging they cheated consumers out of tens of thousands of dollars.
The court actions seek to shut down these outfits in Ohio with full restitution to homeowners.
"In each case, the rescue operations charged ridiculously high fees to assist homeowners who were at risk of losing their homes," said Attorney General Richard Cordray. "In the end, homeowners got no help and ended up in deeper mortgage trouble. No Ohioan should ever pay for foreclosure assistance, and we have legitimate housing counselors who help you for free."
The suits were filed against National Homeownership Assistance Foundation Ltd (NHAF), located in Worthington, Ohio, and Stephens Investment & Financial Services dba Lifeline Financial Legal Home Solutions, located in Fort Lauderdale, Fla.
Offered false hope
Cordray accuses NHAF and its managing partner, Casimir S. Suwinski, its general manager, Casimir S. Suwinski Jr. and its president, Arden Banks of charging homeowners on average $2,500 for foreclosure prevention services, such as securing loan modifications from mortgage servicers, and then not providing the service.
In the case against Lifeline, Cordray accuses the operation of claiming that it could "reduce your payments up to 10-50 percent," or "lower your interest rate." After charging thousands of dollars, the company failed to deliver the service. Lifeline also misled consumers by misrepresenting its legal expertise and the availability of legal services, including "retained legal experts."
Complaints about Lifeline Financial are not limited to consumers in Ohio. Edward, of Billings, MT, says he paid the company $1200 in July, 2009, to negotiate a loan modification to save his home from foreclosure.
"Our mortgage company told me LifeLine sent in our Making Home Affordable package in August and then never got back with them as of October 30, 2009," he writes ConsumerAffairs.com. "When I complained they threw us under the bus. I want our money returned to us."
Additionally, Cordray filed a suit against 1st American Law Center Inc. based in Oceanside, Calif. In that filing, 1st American is accused of charging homeowners as much as $4,000 for foreclosure prevention assistance services such as negotiating loans and accepting payment for these services without delivering on its promises.
"I contacted them (1st American) to help lower my mortgage rates and credit cards," writes Randy of Hiawatha, KS. "They would stall and would not answer email or phone calls. When I had enough, I contacted them by phone and stated I wanted out. They finally agreed that I could be let out of the contract. I had paid them $1995.00. They stated that they would give me $1300.00 back." Randy tells ConsumerAffairs.com that as of August 17, 2010, he had yet to receive the money. "This is a bogus company," he concludes, "who prey on people who are struggling to keep afloat."
All three foreclosure rescue operations have been charged with multiple violations of Ohio law, including failure to deliver, misrepresentation and unfair or deceptive acts or practices. Cordray is seeking civil penalties from each of the companies in addition to full restitution for consumers. Further at the AG's request, the court has ordered an attachment of NHAF's assets, pending resolution of the case.
With these lawsuits, Cordray has taken formal legal action against 14 foreclosure rescue scam operations targeting Ohio homeowners since he took office in January 2009. He also has sued three mortgage servicers for unfair or deceptive loan modification practices.
The lawsuits against Carrington Mortgage Services, American Home Mortgage Servicing Inc. and Barclays Capital Real Estate dba HomEq Servicing for violations of Ohio's Consumer Sales Practices Act introduce an unprecedented legal strategy into the fight against foreclosure.
