Texas AG secures refunds for mortgage rescue victims

Chris Rizo Apr. 11, 2008, 1:13pm

Greg Abbott

AUSTIN-Texas Attorney General Greg Abbott has secured an order that requires Foreclosure Assistance Solutions Inc. to refund $370,000 to 338 homeowners.

The company, which offered a mortgage rescue service, sought out consumers who were behind on their mortgage payments.

They charged struggling homebuyers a $1,200 fee to negotiate with loan officers and lenders to help them from lapsing into foreclosure.

The state alleges that after consumers paid Foreclosure Assistance Solutions Inc. they were largely ignored by the company.

"At a time when regulators, policy makers and stakeholders are working to help struggling families, unscrupulous operators are scheming to profiteer at homeowners' expense," Abbott said in a statement.

"These defendants charged large fees and failed to deliver on their false promises. This legal action shuts down an unlawful scheme to defraud Texas homeowners," he added.

At the request of the attorney general, the Bexar County District Court issued a permanent injunction against the Florida-based company to prevent the firm from providing foreclosure mitigation assistance to Texas consumers at risk of losing their homes.

The company's operators -Herb Zerden and Adolfo Quintero - were ordered to return $370,000 to homeowners and place an additional $105,000 in an escrow account should additional victims come forward.

The settlement agreement also requires the defendants in the case to pay $100,000 in civil penalties and $175,000 in attorney's fees.

The attorney general on Sept. 14 obtained a temporary restraining order that froze the company's assets. On Sept. 27, the order was expanded to restrict the company's operations.

From Legal Newsline: Reach reporter Chris Rizo by e-mail at csrizo@hotmail.com.

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