Friday, December 14, 2007

Printer Friendly

Attorney General Abbott Takes Legal Action Against Foreclosure Rescue Firm's Unlawful Texas Operations

CORPUS CHRISTI – Texas Attorney General Greg Abbott took legal action Thursday against an unlawful Arizona-based foreclosure rescue operation that targeted struggling Texas homeowners.

According to court documents, Abell Mediation, Inc., and its president and vice-president, Elizabeth Cory and Michael Cory, respectively, fraudulently advertised that the company could save homeowners from imminent foreclosure. The enforcement action seeks a temporary and permanent injunction stopping the defendants from falsely soliciting distressed Texas homeowners.

Media links

Abell Mediation Web Site

Sample Deceptive Letter
Attorney General's lawsuit against Abell Mediation

“At a time when regulators, policy makers and stakeholders are working to help struggling families, unscrupulous operators are scheming to profiteer at homeowners’ expense,” Attorney General Abbott said. “These defendants charged large fees and failed to deliver on their false promises. This legal action seeks to shut down an unlawful scheme to defraud Texas homeowners.”

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, homeowners who were delinquent on mortgage payments responded to the defendants’ solicitation cards and Web site. The cards claim that “Abell Mediation, Inc. has saved over 7000 homes from foreclosure.” The solicitation also boasts that Abell Mediation, Inc.’s “staff of highly trained loss mitigation specialists” has established relationships with mortgage lenders and banks nationwide and can “achieve results that no one else can.” The defendants also told homeowners that they would only accept clients whom they could help.

Homeowners who contacted Abell Mediation, Inc. were pressured to pay fees between $800 and $1,200 immediately. Abell Mediation, Inc. strictly prohibited homeowners from contacting their mortgage lenders. After homeowners paid the fees, many never heard back from the defendants’ representatives and often lost their homes anyway.

The attorney general’s legal action seeks to prohibit the defendants from making false representations to homeowners and deceiving potential clients about the services they provide. The Attorney General also 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 their business as one that conducts telephone solicitations.

Attorney General Abbott reminded the company’s customers that they should not wait for Abell Mediation, Inc. to contact them about the status of their mortgages. Homeowners need to call their lenders immediately and ask what preventative measures, if any, the defendants have taken on their behalf.

The Office of the Attorney General is engaged in a variety of efforts to protect Texas homeowners. In October, Attorney General Abbott secured a temporary injunction against Foreclosure Assistance Solutions, a Florida-based “foreclosure rescue” scheme that targeted Texans who fell behind on their mortgage payments. He also took action against Southern Residential, LLC, a Texas-based foreclosure rescue outfit engaged in similar practices.

In September, Attorney General Abbott launched the Texas Residential Mortgage Fraud Task Force, a partnership that involves key state regulatory agencies to take a proactive stance towards tracking and prosecuting mortgage fraud.

Last month, Attorney General Abbott urged three of the largest mortgage lenders and servicing companies doing business in Texas to take steps to address the high foreclosure rates in the state. In meetings with EMC Mortgage, Countrywide Mortgage and Litton Loan Servicing, he outlined five measures that the companies should implement to restore borrowers’ financial stability, including stepping-up efforts to convert adjustable rate mortgages to fixed-interest loans; subjecting more delinquent loans to mitigation first rather than immediately submitting them to an antagonistic collections process; improving communication and outreach with consumers; waiving penalties and fees while companies work with troubled homeowners; and promptly addressing complaints filed against them with the Office of the Attorney General.

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.texasattorneygeneral.gov.