AG Cooper takes aim at California loan modification scam
Release date: 7/23/2014
North Carolina joins in federal, state sweep of mortgage relief schemes
Raleigh: Schemes like that conducted by a California mortgage relief company that collected illegal upfront payments from North Carolina homeowners and failed to provide them meaningful help must be stopped, Attorney General Roy Cooper said Wednesday.
Cooper today filed a lawsuit against Home Remedy Center and its owner Pamela Gressier of California as part of a national sweep targeting the mortgage relief and loan modification industry. North Carolina is joining with the Consumer Financial Protection Bureau, the Federal Trade Commission and 14 other states to take on scam operations that prey on struggling homeowners or those facing foreclosure.
“We’re joining forces with our state and federal partners to fight illegal schemes that push homeowners in distress closer to foreclosure,” Cooper said. “Homeowners desperate to make their mortgage payments deserve real help, not empty promises.”
Cooper is asking Wake County Superior Court to bar Home Remedy Center from operating in North Carolina and order it to pay refunds to consumers and civil penalties.
As alleged in Cooper’s complaint filed as part of the sweep, Home Remedy Center claimed its lawyers would help homeowners avoid foreclosure and/or lower their mortgage payments by negotiating a loan modification or other loan adjustment with their mortgage company.
As illustrated by affidavits filed by homeowners along with the suit, Home Remedy Center required upfront fees of between $3,495 and $4,999. In some cases, homeowners were told to stop paying their mortgages and avoid contact with their mortgage company. Homeowners were given paperwork to fill out but none of it resulted in successful loan modifications and in some cases the paperwork wasn’t even sent to their mortgage company. Once the upfront fee was paid, homeowners complained that it was nearly impossible to get in touch with Home Remedy Center and the company ignored their demands for refunds.
Cooper’s Consumer Protection Division heard from 10 consumers about the scheme, many of whom complained that Home Remedy Center charged them hefty upfront fees for loan modification assistance but then did little or nothing to actually help them. At least one consumer had foreclosure proceedings initiated against them as a result of this scheme.
Under North Carolina law, it is illegal for companies to charge an upfront fee for foreclosure assistance.
Since 2009, more than 1,200 consumers have complained to the Attorney General’s Office about foreclosure assistance and loan modification schemes. Including today's case, Cooper and his Consumer Protection team have taken 18 foreclosure scammers to court, winning judgments worth more than $1.6 million from foreclosure scammers including refunds for consumer victims of these schemes.
Along with North Carolina, the FTC and the CFPB, attorneys general from the following states participated in today’s sweep: Arizona, Delaware, Florida, Indiana, Illinois, Kansas, Louisiana, Maryland, Michigan, New Mexico, New York, Ohio, Washington and Wisconsin. Also participating are the Maryland Commissioner of Financial Regulation and the Washington Department of Financial Institutions.
“We’ll continue our work to stop these scams, but we’d rather homeowners get real help if they’re facing foreclosure,” Cooper said.
For free help dealing with foreclosure, North Carolina homeowners can contact the NC Foreclosure Prevention Fund and the State Home Foreclosure Prevention Project by calling 1-888-623-8631.
Media Contact: Noelle Talley (919) 716-6413