Tuesday, August 18 2009
Indiana Attorney General Greg Zoeller is suing another foreclosure consultant company, his eighth since taking office in January. The suit against National Foreclosure Consultant Services includes 11 consumers from Allen, Hamilton, Johnson and Marion counties and claims losses totaling more than $10,000. The legal action also claims the company did not register as a business in the state of Indiana.
INDIANAPOLIS – A lawsuit filed today against National Foreclosure Consultant Services (NFCS) by Attorney General Greg Zoeller’s Homeowner Protection Unit (HPU) marks Zoeller’s eighth suit against illegal foreclosure consultants since taking office in January. The lawsuit filed in Hamilton County includes 11 consumers from Allen, Hamilton, Johnson and Marion counties and reported losses totaling more than $10,000.
Zoeller’s efforts against illegal foreclosure consultants is fueled by a state-wide initiative to raise awareness among Hoosiers of the availability of free, certified mortgage counseling through the Indiana Foreclosure Prevention Network (IFPN). Homeowners at risk of foreclosure can contact the IFPN at 1-877-GET-HOPE.
“Considering the economic climate we are in, there is zero time to waste on this issue. We are taking an aggressive stand and we won’t wait for more people to be victimized or lose their homes through these illegal practices,” Zoeller said. “There are families in Indiana close to foreclosure and hard choices are being made right now. Illegal foreclosure consultants are not the people we want calling on Hoosiers promising they can save their homes when free, certified mortgage counseling is so easily available.”
Foreclosure consultants claim they can save a home from foreclosure by negotiating or modifying the terms of the homeowner’s existing mortgage. In some cases, the homeowner is directed not to contact their lender during this negotiation process. The lawsuit alleges NFCS did not obtain a necessary $25,000 surety bond to demand payment upfront from their customers. Without the bond, the company is barred from receiving payment until after all services have been performed.
The lawsuit also alleges NFCS failed to register as a business in the state of Indiana. Attorneys general in Florida, Illinois and Minnesota have also filed lawsuits against NFCS citing similar allegations.
The 11 consumer complaints included in the lawsuit allege homeowners were asked by NFCS to pay upfront fees ranging from $950 to more than $3,000 before services would be performed. NFCS failed to modify any of the mortgages for the 11 homeowners. Three of the homeowners were able to negotiate directly with their lenders and modify their own loans. At least one homeowner has filed for bankruptcy and is facing foreclosure.
The IFPN provides a toll-free hotline (1-877-GET-HOPE) which is available to help answer mortgage-related questions for distressed homeowners. For more information on foreclosure-prevention advice through IFPN, visit www.877gethope.org.
“Anyone struggling with their mortgage payments or who may be facing foreclosure should contact the Indiana Foreclosure Prevention Network,” Zoeller emphasized. “I don’t mind sounding like a broken record if it means one more person hears this message and avoids the hazards of hiring a fraudulent foreclosure consultant.”
Of the seven prior lawsuits filed this year against foreclosure consultant companies, three have reached a resolution:
A settlement was reached in June with You Walk Away, Inc., located in California. In exchange for the case being dismissed, You Walk Away agreed to pay $4,000 in restitution to four Indiana consumers and $2,000 to the State for costs and fees.