Local News

Judge shuts down foreclosure scheme

Posted June 4, 2009 12:11 p.m. EDT

— 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.