The State of Oregon has filed a lawsuit against a California company, accusing it of repeatedly violating Oregon's Unfair Trade Practices Act and Mortgage Rescue Fraud Protection Act.
The action accuses American Team Mortgage of charging more than $80,000 in fees from nearly three dozen Oregon homeowners in violation of Oregon law.
"Homeowners facing foreclosure need help, not false promises," said Keith Dubanevich, Chief of Staff and Special Counsel to Oregon Attorney General Kroger.
The lawsuit alleges that since January 2009, American Team Mortgage charged 32 homeowners a total of more than $80,000 in fees for mortgage loan modifications. Most of those fees were charged in advance of providing services in violation of Oregon law, the suit claims.
The company obtained loan modifications for only a fraction of their Oregon clients, and possibly as few as two, the suit says. The state's complaint says the company solicited clients, saying it achieved successful results 95 percent of the time.
Despite American Team Mortgage's poor record of obtaining loan modifications and despite promises to refund clients it could not help, the company refunded only two of the 32 Oregon homeowners who paid advance fees for loan modifications.
By June 2010, the lawsuit alleges, American Team Mortgage effectively went out of business. Its phone number was disconnected. Mail was returned. Dozens of Oregon homeowners were left without a loan modification or a refund. At least one client lost his home to foreclosure. Others are facing foreclosure.
To protect Oregon homeowners from predatory mortgage relief scams and unscrupulous loan modification practices, the Oregon Legislature passed laws in 2008 and 2009 regulating companies involved in foreclosure counseling and loan modification services.
The lawsuit also alleges that American Team Mortgage failed to register with the state.