Ohio Foreclosure Rescue Scams Sweep

Ohio Attorney General Dann Files 6 Suits Against Companies For Foreclosure Rescue Scams

August 8, 2007 -- CINCINNATI – Ohio Attorney General Marc Dann today filed lawsuits against 6 different companies for preying on Ohioans with false promises of saving their homes from foreclosure. The attorney general’s investigations produced evidence that these companies may have violated at least five different consumer laws: Consumer Sales Practices Act (CSPA), Telephone Solicitation Sales Act (TSSA), Home Solicitation Sales Act (HSSA), Debt Adjusters Act (DAA), and the Credit Services Organization Act (CSOA).

“Today, along with filing lawsuits against 6 foreclosure rescue firms, I am issuing a warning to companies who think they can get away with exploiting families who face the prospect of losing their homes: Stop Now or my office will stop you,” Attorney General Dann said.

“While predatory lending is despicable, I can think of little that is more shameful or sleazy than attempting to profit from the misery and fear of Ohioans who face foreclosure and are willing to do anything—to grab on to any ray of hope—that may enable them to keep their homes.

“These scams are contemptible and I urge people to contact my office at once if they think they have been victimized.

“I also want to warn everyone again that if a deal sounds to good to be true, it probably is. So please be very, very careful and wary of anyone who promises to stop foreclosures for a fee,” Mr. Dann said.

Suits were filed against the following companies in Cuyahoga, Delaware, Franklin, Hamilton, Lucas, and Mahoning counties:

American Housing Authority, Inc.- 3857 Birch Street, Suite 611 Newport Beach, California
American Housing Financial, Inc. - 1501 W. Chipman Rd., Phoenix, Arizona
Cary Lavensky d/b/a Home Restoration Services – 9617 Baltic Road, Cleveland, Ohio
F.A.S., LLC d/b/a Foreclosure Assistance Solutions and Mortgage Second Chance - 2465 McMullen Booth, Unit J, Clearwater, Florida 33759
Foreclosure Solutions, LLC - 10945 Reed Hartman HWY, Suite 219, Cincinnati, Ohio
Richard Pinnix d/b/a Pinnix Business Services - 16781 Chagrin Blvd., #105 Shaker Heights, Ohio.
United Foreclosure Managers, LLC - 4300 Belmont Avenue, Ste. 3, Youngstown, Ohio

According to the Attorney General, the basic elements of the scam involve a company contacting a homeowner facing foreclosure by phone or by showing up at their door and promising to stop the foreclosure process for a fee. The homeowner then, in a desperate, last ditch effort to save their home, succumbs to the false promises made by the company and hands over money they cannot afford to lose. The foreclosure rescue then pockets the funds and eventually the home is foreclosed upon, leaving the homeowner with little besides broken promises and broken dreams.

The investigations revealed that lenders foreclosing on the homes were not even contacted by the fraudulent companies. Promises of “Liberty and Housing for all!” or “Will Stop Foreclosure Immediately!” rang hollow for the Ohio families bilked by these scam artists.

The violations alleged in the suits include:

CSPA violations: failure to deliver promised, unconscionable acts or practices, no substantial benefit received /consumers relief upon promised services to their detriment/unconscionable arbitration clauses, failure to register trade name with Secretary of State

TSSA violations: failure to register under TSSA, making false or misleading statements, failure to obtain written confirmation

HSSA violations: No notice of 3 day right to cancel, No notice of right to a written notice of cancellation, failure to inform

DAA violations: committed unfair and deceptive acts by engaging in debt adjusting activities, including claiming to be able to discharge a note, or debt without complying with the DAA

CSOA violations: failed to register with Division of Financial Institutions before conducting business as a Credit Service Organization

Mr. Dann is asking the Common Pleas courts to declare each act alleged a violation of the respective law claimed; that each company be enjoined from violating Ohio laws again; that the companies pay restitution to the consumers involved; to access a civil penalty of $25,000 per violation; and to bar the companies from doing business until they have satisfied all monetary obligations.

The Attorney General also offered these tips for avoiding similar scams:

1. Don't panic. Get detailed information about the deadlines you face in resolving your problems. Pay special attention to the date on which you would lose legal right to ownership of your home.
2. If you have a pending lawsuit against you for your home you can contact legal aid or the bar association to find an attorney to represent you.
3. If you are getting foreclosure threatening letters but are not yet in a lawsuit contact a certified HUD counselor for assistance
4. Be wary of any claim to stop foreclosure for a fee.
5. Never sign a contract under pressure. Take your time and consult a lawyer, if possible.
6. Never make your mortgage payments to anyone other than your lender. If you can't pay, do not ignore warning letters from your lender; contact them immediately to work out payment arrangements.
7. Don't sign anything with blank lines or spaces; information could be added later without your knowledge and consent.
8. Call the Better Business Bureau and the Attorney General’s office to see if there are any complaints against the company before you use them. Contact the AG’s office at www.ag4ohio.gov or by calling 1-877-AG4OHIO.

If you do not speak English, never use a company’s translator. Instead, insist on using your own.

Source: Ohio Attorney General

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