The press release from the Ohio Attorney General is below but the case that really caught my attention was the one against 1st American Law Center where a California attorney was charged as not being authorized to act as an attorney in Ohio and not registered to do business in the state.
The attorney is charged with violating the Ohio debt adjuster act, the telephone solicitation sales act, the consumer sales practices act, and substantive rules.
This case sounds like it could be applied against many debt relief companies that advertise on national television. The suit says:
Defendant, through the name 1st American law Center, Inc (a company that is registered to operate in the state of California, but not in Ohio) has caused television advertisements to air in Ohio, soliciting and inviting consumers to call and enlist the services of FAL to help reduce their monthly mortgage payment through negotiations with the consumers’ lenders. – Source
This is just another painful lesson in why debt relief providers that sell services in multiple states must be careful they are first registered to do business in that state but also that they are compliant with state debt laws.
(COLUMBUS, Ohio) – Ohio Attorney General Richard Cordray has filed three new lawsuits against foreclosure rescue operations for bilking Ohioans out of tens of thousands of dollars. In the lawsuits, Cordray is seeking to shut down these outfits in Ohio with full restitution to homeowners.
“In each case, the rescue operations charged ridiculously high fees to assist homeowners who were at risk of losing their homes,” said Cordray. “In the end, homeowners got no help and ended up in deeper mortgage trouble. No Ohioan should ever pay for foreclosure assistance, and we have legitimate housing counselors who help you for free if you call Save the Dream at 1-888-404-4674.”
In Franklin County Common Pleas Court, Cordray filed suits against National Homeownership Assistance Foundation Ltd. (NHAF), located in Worthington, and Stephens Investment & Financial Services dba Lifeline Financial Legal Home Solutions, located in Fort Lauderdale, Fla.
Cordray accuses NHAF and its managing partner, Casimir S. Suwinski of Delaware, its general manager, Casimir S. Suwinski Jr. of New Albany, and its president, Arden Banks of Grove City, of charging homeowners on average $2,500 for foreclosure prevention services, such as securing loan modifications from mortgage servicers, and then not providing the service. The operation is accused of taking more than $59,000 from Ohioans.
In the case against Lifeline, Cordray accuses the operation of claiming that it could “reduce your payments up to 10-50%,” or “lower your interest rate.” After charging thousands of dollars, the company failed to deliver the service. Lifeline also misled consumers by misrepresenting its legal expertise and the availability of legal services, including “retained legal experts.”
Additionally, Cordray filed a suit in Stark County Common Pleas Court against 1st American Law Center Inc. based in Oceanside, Cal. In the filing, 1st American is accused of charging homeowners as much as $4,000 for foreclosure prevention assistance services such as negotiating loans and accepting payment for these services without delivering on its promises.
All three foreclosure rescue operations have been charged with multiple violations of Ohio law, including failure to deliver, misrepresentation and unfair or deceptive acts or practices. Cordray is seeking civil penalties from each of the companies in addition to full restitution for consumers. Further at Cordray’s request, the court has ordered an attachment of NHAF’s assets, pending resolution of the case.
With these lawsuits, Cordray has taken formal legal action against 14 foreclosure rescue scam operations targeting Ohioans since he took office in January 2009. The lawsuits are part of a broader effort to hold companies accountable for violating Ohio law in the wake of the foreclosure crisis. Cordray also has sued three mortgage servicers for unfair or deceptive loan modification practices. The lawsuits against Carrington Mortgage Services, American Home Mortgage Servicing Inc. and Barclays Capital Real Estate dba HomEq Servicing for violations of Ohio’s Consumer Sales Practices Act introduce an unprecedented legal strategy into the fight against foreclosure.
To report a foreclosure rescue operation or to file a complaint, consumers should contact Attorney General Cordray’s office at (800) 282-0515 or www.SpeakOutOhio.gov.
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