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TMCNet: Firm to pay state $100k+ for misleading marketing for foreclosure help

[September 03, 2010]

Firm to pay state $100k+ for misleading marketing for foreclosure help

Sep 03, 2010 (The Wisconsin State Journal - McClatchy-Tribune Information Services via COMTEX) -- The Wisconsin Department of Justice obtained a default judgment against a California company for breaking state law while marketing purported loan modification and foreclosure rescue services.

The Federal Loan Modification Center was ordered to pay $105,754 and is forbidden from conducting business in further violation of the law, Attorney General J.B. Van Hollen announced Thursday.

According to the state's complaint, FLM marketed purported loan modification and foreclosure rescue services to distressed homeowners in Wisconsin under the guise that it was part of a federal program, despite having no affiliation with the federal government.

The company informed homeowners that attorneys would work on their behalf, demanded up-front fees and advised some homeowners to stop talking to their lenders and to stop making their mortgage payments in order to "expedite" the modification process, the Justice Department said.

FLM collected as much as $3,500 in up-front fees from Wisconsin homeowners then failed to provide the services promised or refunds.

"The Wisconsin Department of Justice joins the FBI, the Federal Trade Commission and other state and federal law enforcement agencies in warning distressed homeowners to look out for loan modification and foreclosure rescue fraud," Van Hollen said in a statement. "We continue to advise homeowners to never pay up-front fees for promised services but to go directly to their lenders for assistance or to contact a HUD- approved housing counselor who will work with the homeowner for free." To see more of The Wisconsin State Journal, or to subscribe to the newspaper, go to http://www.wisconsinstatejournal.com. Copyright (c) 2010, The Wisconsin State Journal Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com, e-mail services@mctinfoservices.com, or call 866-280-5210 (outside the United States, call +1 312-222-4544).

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