Texas AG Announces Final Distribution Of Restitution From Loan Modification Company; Firm Takes Total Hit Of $750K

From the Office of Texas Attorney General Greg Abbott:

• Texas Attorney General Greg Abbott [yesterday] announced the conclusion of the state’s enforcement action against Foreclosure Assistance Solutions (FAS). As a result of an agreement, the Florida-based company must no longer engage in the foreclosure mitigation business in Texas and has paid more than $390,000 in restitution to 351 Texas homeowners. FAS is the eighth foreclosure rescue operation shut down by Attorney General Abbott.

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• Homeowners who contacted Foreclosure Assistance Solutions were pressured to immediately pay a $1,200 fee and enter into a contract. The contract prohibited homeowners from contacting their mortgage lenders – yet communicating with lenders is critical when homeowners are facing financial difficulties. After paying the $1,200 fee, homeowners were largely ignored, and many of their homes were foreclosured [sic].

• Today’s settlement also prohibits the company from conducting Texas-based mortgage foreclosure mitigation in the future and requires that the defendants pay a total of $750,000, including $475,000 in restitution, $100,000 in civil penalties and $175,000 in attorneys’ fees.

For the Texas AG's press release, see Texas Attorney General's Enforcement Action Provides Restitution To Texas Homeowners (Foreclosure Assistance Solutions Inc. repays 351 Texas homeowners more than $390,000).

For relevant court documents on this case, see:

• Court order distriubting remaining restitution from Foreclosure Assistance Solutions,
• Agreed final judgment and permanent injunction - Foreclosure Assistance Solutions, et al.,
• Original Texas AG's lawsuit (9/2007) - State of Texas vs. Foreclosure Assistance Solutions, et al. (lawsuit alleged violations of the Texas Deceptive Trade Practices Act).