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Judge shuts down foreclosure scheme

Posted June 4, 2009

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— A Superior Court judge has ordered a Raleigh company that advertised on local gospel radio that it could save homes from foreclosure to stop doing business in North Carolina, Attorney General Roy Cooper said Thursday.

Judge Howard Manning agreed Wednesday with Cooper’s request to stop Mortgage Help Services Inc. and Chief Executive Nathaniel Livingston from advertising, performing or taking money for loan modification and foreclosure assistance services. Cooper is asking the court to ban the company permanently and order it to pay refunds to consumers and civil penalties.

“Instead of helping people save their homes, foreclosure rescue schemes put struggling families deeper in the hole,” Cooper said in a statement. “We’re cracking down on scams that prey on homeowners and encouraging people to get real help instead.”

Mortgage Help Services and Livingston claimed in ads to be experts in modifying mortgage loans and rescuing homes from foreclosure. A lawsuit filed by the Attorney General's Office alleges that consumers who paid Mortgage Help Services between $500 and $1,500 upfront got little or no help modifying their loans to lower their interest rates or monthly payments.

A North Carolina law that Cooper lobbied for ,makes it illegal to charge an upfront fee for foreclosure assistance or mortgage loan modification services.

The company often encouraged homeowners to stop making their mortgage payments and cease communicating with their lender, which put them deeper in debt and closer to foreclosure, Cooper said.

Since January 2008, the Attorney General's Office has taken seven foreclosure assistance schemes to court, including Mortgage Help Services, he said.

“These schemes waste homeowners’ time and money when they can least afford it,” he said. “Don’t let desperation drive you to become a victim. Genuine help with mortgage and foreclosure problems is available for free.”

Legitimate foreclosure assistance counseling is available at no cost from non-profit agencies throughout North Carolina, and nationally through 1-888-995-HOPE, which can connect North Carolinians with free resources in their own communities.

Consumers can file complaints about loan modification and foreclosure rescue scams with the Attorney General’s Office by calling 1-877-5-NO-SCAM toll-free within North Carolina.

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  • beachboater Jun 4, 2009

    You mean I get my $1500 back and get to keep my house?

    Wowsers........that's a great deal....

    It's a shame that people can stoop so low.

  • ezLikeSundayMorning Jun 4, 2009

    Sure, the home owners have responsibility here, but that does mean the AG shouldn't fight to put these scammers out of business. They are con artists not misunderstood businesses.

  • raleighres1 Jun 4, 2009

    claret and blue - cmon now, why I agree with you that predatory lending is out there you also have to lay some of the blame with the "buyer who knew he could not afford but still signed on the line". If the buyer knew then why did he sign. Its the buyer's fault also for being so greedy to have something more than he could handle, especially if he knew in the beginning he couldnt afford it.

  • Professor Jun 4, 2009

    Good for you judge.

  • claret and blue Jun 4, 2009

    Surely these poor poor people have been preyed upon enough by predatory lenders who sought to sell them a house the buyer knew he could not afford but still signed on the line for so he could have a 7 bedroom home. Take it easy on these poor souls!

  • LuvMyLife Jun 4, 2009

    Maybe they don't pay the debt down because they are too far behind. I know 2 families that have lost their homes due to the failing economy and it isn't pretty.

  • FoxtrotUniformCharlieKiloakaCALM Jun 4, 2009

    I think any one stupid enough to pay " between $500 and $1,500 upfront " deserves what they get. Why wouldn't you put that money towards your debt? People......