Minnesota Attorney General Sues "Foreclosure Consultants"

[Jan 30, 2009.]

 

The Minnesota Attorney General filed lawsuits against two companies in Florida that allegedly ripped off Minnesota homeowners. The companies are accused of charging homeowners upfront fees of as much as $1,850 to renegotiate mortgage loans.

Mortgage "foreclosure consultants" are companies that promise to renegotiate mortgage loans to help troubled homeowners avoid foreclosure. Business has been on the upswing for this type of service as more homeowners find themselves a few paychecks away from losing their homes.

Minnesota law doesn't allow foreclosure consultants to accept payment until all services have been completed. The two companies are accused of not delivering the promised services.

“These foreclosure consultants exchanged the hard-earned money of desperate homeowners for empty promises. Nobody should ever pay money in advance to a company promising to save their home from foreclosure,” said Minnesota Attorney General Lori Swanson in a statement.

The two "mortgage consultants" named in the Minnesota suit are IMC Financial Services and American Financial Corp., which does business as National Foreclosure Counseling Services (NFC).  According to the Star Tribune, American Financial also has been sued by Illinois and Colorado's attorneys general. Minnesota has sued 12 mortgage foreclosure consultants over the past year.

People who think they've been scammed by a mortgage foreclosure consultant should contact the attorney general's office in their state.

But the best way to avoid being scammed is to deal directly with your mortgage lender if you're having trouble making payments. Your mortgage lender may be able to put together a modified payment plan or take other steps to help you stay in your home. Also avoid paying anyone an upfront fee to negotiate your mortgage.

If you really need help, search the U.S. Department of Housing and Urban Development site for a list of reputable housing counselors in your area.

 

About Author:

Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.