Florida AG Joins Illinois, Minnesota Counterparts In Tagging Jacksonville Upfront Fee Loan Modification Firm With Suit; Alleges Deceptive Practices

In Jacksonville, Florida, WJXT-TV Channel 4 reports:

• Florida's attorney general has sued a Jacksonville company, claiming it's defrauding homeowners who are facing foreclosure. According to the lawsuit, National Foreclosure Counseling Services targeted homeowners and charged them up-front fees to modify their loans, in violation of Florida law.(1) The Attorney General's office said the company collected an average of $2,000 in up-front fees, and charged $125 an hour. The lawsuit also claimed that the company failed to perform the services following payment.

• State investigators also said the company lured homeowners using mailings which implied they were coming from a government agency. The mailings claimed the consumers had been selected for special programs by "Government Insured Institutions," and stated the mailings were a last attempt to assist the homeowners before foreclosure.(2)

• The Attorney General also requested the Duval County Circuit Court issue an injunction against the company, requiring it to immediately stop demanding up-front fees from customers before providing services. The company offers services nationwide and has already been sued by the attorneys general of Illinois and Minnesota.

Source: State Sues Foreclosure Rescue Company.

For more from the Florida AG's office, see:

• Press release: Attorney General Sues Jacksonville Company for Foreclosure Rescue Fraud,
• Lawsuit: State of Florida v. National Foreclosure Counseling Services Corp., et al.,
• Consumers who wish to file a complaint about this company may do so by filing an affidavit with the Attorney General’s Office. A form and instructions is available online here.

(1) Also named as defendants in the lawsuit are: Raymond Paulk, Robert V. Dallavia, and American Foreclosure Counseling Center.

(2) In addition, the lawsuit alleges that, since October 1, 2008, the defendants "required homeowners who want their services to sign statements asserting that they are not "IN ANY WAY CONFUSED ABOUT ANY PART OF THE WORKING AGREEMENT," that they are not victims of the Defendants under the Florida Deceptive and Unfair Trade Practices Act, that they are "CONFIDENT THEY [ARE] NOT BEING VICTIMIZED ... IN ANY WAY WHAT-SO-EVER" and that the defendants are "NOT ATTEMPTING TO DUPE, MISLEAD, SWINDLE OR CHEAT" them." (Obviously, a not-so-subtle attempt to get the homeowners facing foreclosure to waive their legal rights under the statute.) The suit also alleges that the defendants "employ a sales force of approximately 140 persons and bringing in approximately $500,000 in fees each month." See Lawsuit - paragraph 26-27.

The lawsuit also alleges(at paragraphs 28-33) that the defendants' mailings:

• give the impression they come from a government agency,
• refer to the Defendants as "housing counseling community service[s],"
• state that the homeowner's property "has been selected for special programs by the Government Insured Institutions,"
• tell the recipients to contact an "Advisor for Duval County" or another Florida county, and that a representative for Duval [or other] County is available" to talk to the homeowner,"
• state that they are an "urgent notification" and constitute a "last attempt to assist you,"
• state that the property in question "qualifies" for loan modification.