Evansville resident loses $1,800 in loan modification scam
EVANSVILLE, IN – December 9, 2010 – (RealEstateRama) — Indiana Attorney General Greg Zoeller today filed a lawsuit in Vanderburgh County against Hope4Homes, Inc., a for-profit foreclosure consultant, claiming the company has been operating in Indiana illegally and has violated several state consumer protection laws. Hope4Homes is located in California and is owned and operated by Mahan Abbasi, who is listed as a defendant in the suit.
Evansville residents Harold and Sharon Matthews paid Hope4Homes $1,800 to negotiate a home loan modification. According to the state’s complaint, the Matthews were instructed by Hope4Homes to stop making payments on their mortgage while Hope4Homes negotiated a new loan. The Matthews fell three months behind on their payments, which had been current, and new loan terms were not reached. Hope4Homes advertised a “100% Money Back Guarantee if we cannot achieve a loan modification for our clients,” however no refund has been provided.
“So-called ‘foreclosure consultants’ are taking advantage of those who are facing desperate financial hardship and scamming them out of thousands of dollars when they are most vulnerable. They are operating illegally and this will not be tolerated in Indiana,” Zoeller said. “Working to protect Hoosier consumers includes bringing actions against those who violate our state laws and also warning people to protect themselves, their family and their neighbors – beware of the warning signs and don’t let a loved one fall victim to these scams, no matter how convinced they may be of their legitimacy.”
In Indiana, a foreclosure consultant or credit service organization must have a $25,000 surety bond registered with the Attorney General’s office before demanding payment upfront before services are performed. The company’s bond acts as an insurance policy for consumers in the event the company fails to perform the services and does not provide a refund. HopeForHomes failed to meet those requirements and also did not register to do business in Indiana.
Consumer complaints against foreclosure consultants spiked in 2009 as the economy took its toll on the unemployed and homeowners who typically might ignore “too-good-to-be-true” promises. They were drawn to claims made on websites, late-night TV commercials and radio programs. The Attorney General’s Homeowner Protection Unit is currently investigating more than 150 consumer complaints against foreclosure consultants. The majority of the complaints filed and the on-going investigations involve companies not located in Indiana.
Homeowners looking to avoid foreclosure are encouraged to work with a certified nonprofit housing counselor to determine their available options. Call the Indiana Foreclosure Prevention Network at 1.877.GET.HOPE for more information or visit the Attorney General’s consumer protection website http://www.indianaconsumer.com/ to learn more about homeowners’ rights in Indiana.
Email: Molly.Butters (at) atg.in (dot) gov