Help is available
• If you are behind on mortgage payments, don’t wait for a foreclosure notice. Call and get free counseling and advice from the Indiana Foreclosure Prevention Network at 1-877-GET-HOPE.
•Homeowners who believe they may have been the victim of a foreclosure consultant scam can file a complaint with the Attorney General’s Consumer Protection Division at www.IndianaConsumer.com or by calling 800-382-5516.
Indiana Attorney General Greg Zoeller is taking a tough stance against scam artists who prey on people who have fallen behind on mortgage payments and are facing foreclosure.
Zoeller stopped by the clerks’ offices in Allen, Whitley and Adams counties Monday to file three lawsuits against out-of-state foreclosure consultants accused of ripping off northeast Indiana residents.
Foreclosure consultants often promise to help homeowners lower mortgage payments or to help stop foreclosure by negotiating with lenders. The unscrupulous companies usually demand upfront payments and are not bonded to practice in Indiana, Zoeller said.
“It’s especially distressing that these companies are taking advantage of people when they are at a desperate point in their lives and are facing higher utility bills because of the harsh winter,” Zoeller said.
The lawsuit filed in Allen County is against Mortgage Auditing Solutions of California for allegedly entering into a contract with a Fort Wayne resident and promising to lower home loan payments. The company demanded a $495 an upfront fee.
In Whitley and Adams counties, Mortgage Solutions Clearing House Inc. of Florida and Federal Loan Modification Law Center, LLP of California are accused of taking $1,995 in upfront charges from two people. Both companies took the payments but did not obtain the promised mortgage modifications.
None of the companies was bonded, Zoeller said.
According to state law, all credit services organizations, including foreclosure consultants, must file a $25,000 surety bond with the Office of the Indiana Attorney General before doing business in Indiana, Zoeller said.
“If they don’t have a bond, it’s a scam,” he said.
Those working with a foreclosure consultant should ask for proof of the company’s surety bond in Indiana, he said.
Consumers have reported receiving direct mail, hearing radio advertisements or being solicited online, Zoeller said.
The companies are accused of violating the Credit Services Organization Act, Deceptive Consumer Sales Act, Mortgage Rescue Protection Fraud Act and the Home Loan Practices Act. The lawsuits seek injunctions against the companies, restitution for the victims, civil penalties and investigative costs.
Although the economy is starting to rebound, not everyone is benefiting, Zoeller said.
“A lot of people are in trouble and are not seeing or feeling that upswing,” Zoeller said.
“We pride ourselves on Hoosier hospitality, but we don’t welcome this type of scam,” Zoeller said. “We are very aggressive about finding the companies who are taking advantage of struggling and desperate homeowners.”
Zoeller’s office has filed 196 lawsuits against foreclosure consultants since 2009, including 10 in Allen County, according to office representative Erin Reece.
The Journal Gazette attempted to contact the companies Monday. Five phone numbers were listed for the three businesses, but all were answered with a recording stating that the number was no longer in service.