Michigan AG Files Criminal Charges In Separate Cases Alleging Loan Modification Firms Clipped Homeowners For Upfront Fees, Then Failing To Help

From the Office of the Michigan Attorney General:

• Attorney General Mike Cox today announced the filing of three criminal complaints and a total of 10 charges against illegal advanced fee "foreclosure rescue" operations accused of defrauding Michigan families of thousands of dollars. Global Financial Consulting Services of Dearborn Heights, Advanced Mediation Services of Midland and James Klein of Midland are accused of illegally charging homeowners facing foreclosure upfront fees for mortgage modification assistance.(1) The defendants claimed they would help homeowners by working with their lenders in an attempt to modify the borrower's mortgage. After paying the upfront fee, borrowers found that the companies could not secure a modification and were subsequently unable to get their money back.

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• In addition to [the above] charges, Cox announced that he has partnered with the Federal Trade Commission and delivered Notices of Intended Action (NIAs) to 13 out-of-state companies accused of illegally demanding upfront fees from Michigan consumers for loan modification services.(2)

For the entire press release, see Cox Takes Aim at Advanced Fee "Foreclosure Rescue" Scams.

(1) According to the AG's press release, Global Financial Consulting Services faces four criminal counts including two counts of charging upfront fees before services were rendered, a violation of the Credit Services Protection Act, and two counts of making misleading statements. Advanced Mediation Services and James Klein each face two counts of charging upfront fees before services were rendered, a violation of the Credit Services Protection Act, and one count of making misleading statements. Each of the charges carries a penalty of up to 90 days in jail and/or a fine of $1,000 in addition to the requirement that the companies make full restitution to each of their victims.

(2) The companies receiving NIA warnings from Cox today include:

• 1 Global Financial, Inc., of Fort Lauderdale, FL;
• 21st Century Legal Services and Fidelity National Legal Service, of Rancho Cucamonga, CA;
• Best Interest Rate Mortgage, of Westmont, NJ;
• Echo Loans & Financial Solutions, of Foothill Ranch, CA;
• Elect Group LLC, of Oakland Park, FL;
• Federal Home Savers, of Commack, NY;
• Fresh Start Home Modification, of Woodbury Heights, NJ;
• Hope N Housing, of Norwalk, VA;
• IMC Financial, of Clearwater, FL;
• Lifeguard Financial, of Fort Lauderdale, FL;
• National Modification Corp., of Hauppauge, NY;
• North American Relief, LLC, of Costa Mesa, CA; and
• Peoples First Financial Inc., of San Diego, CA.