Minnesota AG Sues Two Foreclosure Consultants

Posted by Orb Staff on February 02, 2009 No Comments
Categories : Mortgage Servicing

Attorney General Lori Swanson has filed lawsuits against two so-called mortgage foreclosure consultants, alleging they targeted homeowners facing foreclosure with illegal up-front fees as high as $1,850 and empty promises to save their homes.

The lawsuits are against IMC Financial Services LLC and American Financial Corp., both of which have offices in Florida. American Financial does business as National Foreclosure Counseling Services. The lawsuits bring to 12 the number of bogus foreclosure consultants sued by the Swanson in the last year.

"These foreclosure consultants exchanged the hard-earned money of desperate homeowners for empty promises," the attorney general says. "Nobody should ever pay money in advance to a company promising to save their home from foreclosure."

A 2004 Minnesota law bars foreclosure consultants from charging any compensation until after the foreclosure consultant has "fully performed each and every service the foreclosure consultant contracted to perform or represented he or she would perform."

Swanson has also expressed concern about a new breed of company that operates like a foreclosure consultant by promising to negotiate or modify the terms of the homeowner's existing mortgage, but instead, targets homeowners who may be struggling financially but are not yet in default or foreclosure. Swanson and state legislators have proposed legislation designed to close loopholes in existing state law regulating foreclosure consultants and to prohibit mortgage modification companies from soliciting up-front fees and then failing to deliver the promised services.

SOURCE: Office of Attorney General Lori Swanson

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