Tuesday, August 01, 2017

Arizona AG Scores $240K+ Civil Judgment Against Real Estate Operator Who Used False Promises To Dupe Financially Strapped Homeowners Into Signing Over Control Of Their Homes, Then Using Properties In Rent-Skimming Racket

From the Office of the Arizona Attorney General:
  • Attorney General Mark Brnovich announced his office obtained a $241,401 judgment against Mortgage Relief Solutions, Inc. and its owner, Eric David Brown. The judgment also prohibits Mortgage Relief Solutions and Eric Brown from engaging in mortgage or real estate-related activity in Arizona.

    In March 2017, the Arizona Attorney General’s Office filed a consumer fraud lawsuit against Mortgage Relief Solutions, Inc. (“MRS”) and Eric Brown. The State alleged MRS and Brown targeted homeowners who were “upside down” on their mortgages and were considering defaulting on their mortgage loans. According to the lawsuit, MRS and Brown falsely claimed they would take over the homeowners’ mortgage payments, thereby allowing them to “move on” and avoid further negative consequences to their credit ratings.

    MRS allegedly told its clients that it had tenant buyers ready to move into their homes and that those tenants had the ultimate goal of purchasing the homes. MRS and Brown allegedly directed MRS’ clients to sign documents that had the effect of giving control over their homes to MRS, Brown, and persons and entities acting in concert with them.

    The State alleged that MRS failed to make promised mortgage payments for its clients, resulting in the clients’ homes going into foreclosure with negative impacts to the homeowners’ credit ratings. The State also alleged that, to the extent that MRS actually had tenants living in its clients’ homes, MRS failed to apply rent payments to its clients’ mortgages and instead retained the funds for MRS’ and Eric Brown’s own use.

    The State obtained a judgment after neither Mortgage Relief Solutions nor Eric Brown contested the State’s allegations brought against them in a Consumer Fraud Lawsuit. The judgment prohibits MRS and Eric Brown from engaging in any activity related to mortgage origination or modification, consumer debt relief, consumer debt modification, real estate sales or leases, or trustee services in the State of Arizona or conducted on behalf of any Arizona consumer. MRS and Eric Brown are also required to pay $241,401 to the State for consumer restitution, civil penalties, costs and fees, and disgorgement of ill-gotten gains.

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