Attorney General Abbott Charges Foreclosure Rescue Firm with Operating
Unlawful Scam
Court freezes assets of Foreclosure Assistance Solutions
HOUSTON - Texas Attorney General Greg Abbott today charged a business with
operating an unlawful foreclosure rescue scam that targeted struggling Texas
homeowners. As a result, the 408th District Court issued a temporary
restraining order and froze assets belonging to three businessmen who
organized the scheme. According to court documents, the defendants
fraudulently advertised that they could save homeowners from imminent
foreclosures.
The defendants named in the petition are: Foreclosure Assistance Solutions,
LLC of Florida, and its principal operators, Herb Zerden and Adolfo
Quintero, as well as J.W.W. Services, Inc. of California and owner John
Woodruff. Under the temporary restraining order, the defendants must stop
falsely soliciting distressed homeowners immediately. Although the temporary
restraining order only applies in Texas, homeowners nationwide are protected
by the state’s asset freeze.
Media links
<http://www.oag.state.tx.us/media/videos/play.php?image=091007fas&id=245>
Click on image
Video of Foreclosure Assistance Web site
<http://www.oag.state.tx.us/newspubs/releases/2007/091007fas_sample.pdf>
Sample of
Deceptive Mailer
<http://www.oag.state.tx.us/AG_Publications/txts/homebuying.shtml>
Brochure: Avoid Home Buying Scams
<http://www.oag.state.tx.us/newspubs/releases/2007/091007fas_pop.pdf>
Attorney General’s lawsuit against Foreclosure Assistance Solutions
<http://www.oag.state.tx.us/newspubs/releases/2007/091007fas_tro.pdf>
Attorney General’s temporary restraining order against Foreclosure
Assistance Solutions
“Foreclosure Assistance Solutions preyed upon vulnerable homeowners who fell
behind on their mortgage payments,” said Attorney General Abbott. “Today’s
restraining order and asset freeze should put an end to an unlawful scheme
that attempts to profiteer from the mortgage crisis.”
Attorney General Abbott added: “Homeowners facing difficulty making their
monthly mortgage payments should be wary of mortgage rescue scams. Schemes
offering too-good-to-be-true solutions are usually just that. Texans who
fall behind on their payments should contact their lender directly to work
out a resolution.”
According to the Attorney General’s enforcement action, the defendants
mailed cards and letters to homeowners whose mortgage payments were
delinquent and thus facing foreclosure. Their correspondence with homeowners
promised established relationships with mortgage companies and banks
nationwide. As a result, they claimed, Foreclosure Assistance Solutions
could stop the foreclosure process.
Homeowners who contacted Foreclosure Assistance Solutions were urged to sign
a $1,200 contract immediately. Under the contract, Foreclosure Assistance
Solutions strictly prohibited homeowners from contacting their lenders.
After homeowners paid the fee, they rarely heard from the company’s
representatives again. When homeowners repeatedly called the company for
answers, they were ignored. As a result, many homeowners still lost their
homes to foreclosure.
Today’s action prohibits the defendants from making false representations to
homeowners. Specifically, the company is prohibited from claiming that a
home is at risk without providing proof of that risk. The court also ordered
the defendants to stop offering assistance to homeowners without describing
the alleged assistance.
The Office of the Attorney General’s petition states that Foreclosure
Assistance Solutions deposited over $13 million in Bank of America accounts
between 2005 and 2006. Most of those funds came from homeowners who faced
foreclosure. That account and others are subject to today’s asset freeze.
The Attorney General seeks court-ordered restitution for homeowners who were
harmed by the defendants’ acts, as well as civil penalties of up to $20,000
per violation of the Texas Deceptive Trade Practices Act. Additionally, the
Attorney General requests up to $5,000 per violation for the defendants’
failure to register the business as one that conducts telephone
solicitations.
The Office of the Attorney General is engaged in a variety of efforts
involving residential mortgages. Last week, Attorney General Abbott launched
the Texas Residential Mortgage Fraud Task Force, a partnership that involves
key state regulatory agencies. The task force, established by House Bill
716, is required “to take a proactive stance towards tracking and
prosecuting mortgage fraud and the perpetrators of mortgage fraud
statewide.”
Earlier this year, Attorney General Abbott secured $21 million in
restitution for Texas homeowners who were harmed by lending giant Ameriquest
Mortgage Co. That case resolved allegations that the company and its
affiliates did not clearly disclose certain terms to homeowners, including
unpredictable adjustable rates.
Homeowners who believe they have been harmed by this or similar fraudulent
businesses may call the Office of the Attorney General’s toll-free complaint
line at (800) 252-8011 or file a complaint online at www.oag.state.tx.us.
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Graet post mate. Keep them coming….