The Florida attorney general's office is suing three companies for charging customers upfront fees for services that were allegedly never performed. The state attorney general's office announced the lawsuit against the companies that each claimed to specialize in obtaining mortgage modifications for homeowners.
According to the Attorney General's Office, the three businesses pocketed thousands of dollars in upfront fees, which is illegal under Florida state law.
DC Financial Group, Deleverage America and Home Owner Protection Economics are accused of asking homeowners to pay upfront fees of between $495 and $2,000 for services expected to help the homeowners avoid property foreclosures. State attorneys say that the firms not only broke Florida state law by charging for the services upfront, but that none of the homeowners actually ended up even receiving modifications.
Assets for the three Florida defendants' were frozen by a county circuit court, and the companies have been ordered to cease operations until a court tells them otherwise.
In general, the announcement of these three businesses highlights the importance for homeowners to make sure that they are going through a reputable firm or business when looking for help applying for a mortgage modification.
And while it's a shame that many Florida homeowners ended up losing money and still not even receiving modifications, it's important to remember that there are still legitimate firms and businesses in the state that can help a homeowner deal with the often lengthy and frustrating process of applying for a modification.
In general a mortgage modification can prevent foreclosure by lowering the interest rate or even extending the terms of a loan, which will decrease the amount due in monthly payments.
Source: South Florida Business Journal, "State sues mortgage modification firms," 2 May 2011