FL Atty General Sues Foreclosure Rescue Firm

[MichaelC 160]

http://www.sun-sentinel.com/business/reale...0,1136362.story

 

Florida Attorney General Sues Foreclosure Rescue Firm

By Mc Nelly Torres

 

South Florida Sun-Sentinel

 

January 23, 2008

 

Attorney General Bill McCollum has sued a South Florida-based foreclosure rescue company, alleging the firm defrauded dozens of homeowners, and is seeking legislation to strength protections for those facing foreclosure.

 

The civil suit — filed jointly with the Office of Financial Regulation in Broward County Circuit Court — charges National Foreclosure Management Inc. and multiple affiliates violated the state's deceptive and unfair trade laws. The suit claims the foreclosure rescue firm or its affiliates defrauded at least 80 homeowners of about $1.7 million in home equity.

 

The company, which also does business as American Home Rescue Inc., selected homeowners who were facing foreclosure and had substantial equity in their homes, the suit said. The company offered to hold the homeowners' propertytitles for a year, and refinance the debt while allowing the homeowners to stay in their houses.

 

But in many cases the rescue firm would sell the home to an investor or straw buyer who would lease the home back to the homeowner at an inflated rental rate, the suit said.

 

"We are tackling this growing problem from several directions to help keep families in the homes they've worked so hard to achieve," McCollum said in a statement.

 

Representatives of National Foreclosure Management and its agent, Wyman F. Roberts, and American Home Rescue Inc. and its agent, Bernard Williams, could not be reached for comment.

 

Four years ago, Debbie Humphrey was facing foreclosure on her Pompano Beach home when she sought the services of National Foreclosure Management. Humphrey lost her home anyway, her credit record was not repaired as promised by the rescue firm and by the time she and her husband, Tyrone Humphrey, filed a complaint with local law enforcement two years ago, they could no longer reach the company.

 

"This needs to stop," said Humphrey, who is named as one of the victims in the suit. "People work for one thing in life and it is to buy a home."

 

On Tuesday, state Sen. Mike Fasano, R-New Port Richey, and state Rep. Clay Ford, R-Gulf Breeze, filed legislation — the Foreclosure Rescue Fraud Prevention Act — to provide a safeguard system to protect homeowners.

 

"I believe this bill will protect a lot of people who are at a time of financial stress and about to lose their homes," said Ford, who worked closely with the attorney general's office to craft the bill.

 

Greg Giordano, a spokesman with Fasano's office, said the legislation sends a clear message that the current laws are not protecting consumers.

 

House Bill 643 — and the companion Senate Bill 992 — would guarantee homeowners a five-day period to cancel any contract agreement with a foreclosure rescue firm. It would require specific definitions be provided to consumers for job titles such as "equity purchaser" or "foreclosure consultant," and prohibit foreclosure consultants from accepting payment until all services are completed.

 

Violators would face up to $15,000 in fines for each infraction.

 

Copyright © 2008, South Florida Sun-Sentinel

[randian 0]

This sort of lawsuit was inevitable. I'm surprised anybody does business with homeowners in foreclosure, given the absurd legal requirements of Florida Statute 501.2078.