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Cooper Goes to Court to Halt Foreclosure-Aid 'Scheme'

Posted February 8, 2008

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— A Florida company "that took struggling homeowners’ money, but did little or nothing to help them fight foreclosure,” has been ordered to stop, Attorney General Roy Cooper said Friday.

Cooper filed suit this week against Mortgage Assistance Solutions, LLC, which also does business as Fresh Start. Fresh Start has an office in Clearwater, Fla., although its manager, Michael Thomas Stoller, resides in Beverly Hills, Calif.

Wake County Superior Court Judge Robert Hobgood ordered the Fresh Start to stop temporarily its their foreclosure assistance and to turn over records on all North Carolina customers within 10 days. Cooper asked the court to ensure that any money North Carolinians paid to Fresh Start goes to either them or their mortgages.

"When you are facing foreclosure, there are people out there who are vultures who will prey on you, prey on anybody who is in a desperate situation," said Josh Stein, a senior deputy attorney general who heads the state's Consumer Protection division.

"These folks (Fresh Start) made representations that were not true, because they knew the homeowners were hoping beyond that they could stay in their homes, when they didn't really have anything to offer," Stein added.

As alleged in Cooper’s complaint, Fresh Start sent mail, promising "creative ways" to help North Carolina homeowners who were facing foreclosure. Postcards said the company would “to immediately pay all the money your mortgage company is currently demanding.”

Homeowners who called were told that Fresh Start had saved many homes from foreclosure and would negotiate with their lenders and help them get a new loan.

Consumers who signed up for the service paid Fresh Start $1,200 to $1,400 and were told not to contact their mortgage lender on their own. “In reality, Fresh Start did little or nothing to help homeowners resolve foreclosure and get new loans,” Cooper said.

Under North Carolina law, it is illegal to charge an upfront fee for foreclosure assistance.

The suit against Fresh Start came amid projections that more than 60,000 North Carolinians will lose their homes to foreclosure this year – the highest rate ever in the state and an increase of 10 to 20 percent from 2007.

“Families facing foreclosure need real help, not expensive schemes that drive them further into debt,” Cooper said. “People should call North Carolina’s free hotline and avoid losing their hard-earned money to scams.”

Five North Carolina homeowners complained to Cooper’s Consumer Protection Division about Fresh Start.

One Wilmington man said he paid $1,200 for help and was told that someone had been “assigned to his case” and was promised that Fresh Start “would handle everything” to help him keep his home.

Finally, after getting no help from Fresh Start and with the foreclosure sale of his house fast approaching, the homeowner turned to a private attorney, who was able to stop the foreclosure.

Another homeowner paid Fresh Start $1,300 to have her loan reinstated and stop foreclosure on her house in Mocksville. She later learned that Fresh Start had never contacted her mortgage lender as promised. After getting no help from Fresh Start, she was able to work out a solution with the lender on her own.

A second court hearing on Fresh Start will be held in 10 days. Cooper has asked for the operating ban on Fresh Start to be made permanent.

 

“Foreclosures are on the rise and many families don’t know where to turn for help,” Cooper said. “Instead of paying an upfront fee for foreclosure assistance, call the HOPE hotline for free help.”

The toll-free hotline, 888-995-HOPE is available 24 hours a day, seven days a week and will connect callers with non-profit counselors in their local communities.

19 Comments

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  • MajorLeagueinfidel Feb 8, 2008

    Too quick to Judge?...you just passed judgement on me....

  • cubed32696 Feb 8, 2008

    "No one can be a victim without their consent" - MajorLeagueinfidel

    That's a ridulous thing to say. There are a lot of people victimized through no fault of their own. I've never claimed to be a victim until my identity was stolen. To this day, I still do not know how or who. Not only did they steal my good credit, I had to file bankruptcy to get away from it. Am I victim? You better believe it. I did nothing wrong, yet I became the criminal, because I had to prove that it wasn't me doing these things.

    Don't be so quick to judge.

  • nicklebon Feb 8, 2008

    I hope we can see some prosecutions just as we want a bank robber brought to justice.

    Bank robbers? You mean like the ones who signed mortgages they couldn't afford? These people, whether through ignorance or stupidity, are costing us a fortune and you feel sorry for them?

    Feel sorry for banks who offered them an opportunity. They will end up losing money. Feel sorry for yourself who will not only foot part of the bill for the bank's lost money with your tax dollars but also loose value on your own property due to foreclosures bringing down property values as banks try to unload them.

    Nick

  • x Feb 8, 2008

    At last, a story about our state govt, the atty general, going after a preditory company who's only intention was ripping off uninformed borrowers. I commend Cooper for getting tough on these theves. I hope we can see some prosecutions just as we want a bank robber brought to justice.

    Unfortunatley there are a lot of hard working and trusting people who have gotten in financial trouble and just don't know what to do. So, when these preditors appear with what looks to be a solution to their problem, they only get in deeper. I hope people with credit trouble pay attention to the recommendations and stay away from these schemes.

  • MajorLeagueinfidel Feb 8, 2008

    Most victim's do give consent in being targeted..whether poor choice, unawareness of their surroundings..appearance of being weak....hands full of shopping bags...leaving a car door unlocked..not paying attention at the ATM machine..leaving garage door open at night..not reading the fine print on your mortgage due to greed.....all choices which by default leave you open to victimization.

  • rperry Feb 8, 2008

    These companies are no different from our policitians,and we fall for them.

  • ThatGuyAgain Feb 8, 2008

    This is unfortunate and the perps should be prosecuted, and apparently they are being prosecuted. But this whole subprime/repo biz stems from borrowers who are not sophisticated enough to understand the deals that they made. That's a charitable way of saying that lots of stupid people got home loans with terms they weren't smart enough to understand. Same thing happens in the car business every day..."sign and drive!" I guess the question is - if you're lending money to someone who wants it and you know they're too dumb to understand what they're doing, is it your fault?

  • Lblum Feb 8, 2008

    "As to them having contacted their lender first, check out the article, this outfit told people not to contact their lender."

    For myself, red flags would have been going up all over the place if I had been told that.

  • likemenow Feb 8, 2008

    Has anyone seen the TV ads for a service/website caled something like "bidonmyloan.com"?..another parasite in the making

  • whatelseisnew Feb 8, 2008

    claudnc

    I am not amazed that these folks were ripping people off. Ignorant people serve as their prey. I do agree with Shine; these folks are criminals and deserve prison time. People have to learn that the only protection they have from being ripped off is themselves. At best the only thing Government can do is put these types of people in prison after the fact. As to them having contacted their lender first, check out the article, this outfit told people not to contact their lender.

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