Foreclosure Rescue Operator Ignores Refund Request From Homeowner; Changes Mind After Connecticut AG Intervenes

In Middletown, Connecticut, WVIT-TV Channel 30 reports:

• Mike and Tracy Banks were living in their Middletown home when their finances became tight. Tracy took time off of work after her mother had a stroke and Mike’s overtime was cut from work. Before they knew it, they were months behind on their mortgage and foreclosure was on their doorstep. They said a postcard arrived in the mail from American Housing Authority and Tracy called the number.

After reportedly being clipped for $1,245 and not getting any satisfaction, the Banks' sought help first from the VA, and then ultimately from Connecticut Attorney General Richard Blumenthal , who is now investigating AHA.

• The Banks' got good news this week. AHA responded to questions from the Blumenthal’s office with a letter. In it, AHA said it "successfully negotiated mortgage relief" and set up the Banks’ repayment plan. AHA also agreed to refund the $1,245 service fee and said they no longer provide service to homeowners in the state of Connecticut. NBC 30 tried to contact AHA, but calls were not returned. The Banks' said it was the VA who set up their repayment plan, not AHA.

For more, see NBC 30 Investigates Foreclosure Nightmare.

Go here for more hot water for American Housing Authority with state AG's in Minnesota, Ohio, and Illinois.