Wis. AG reaches settlement with loan modification company
MADISON, Wis. (Legal Newsline) - Wisconsin Attorney General J.B. Van Hollen obtained a default judgment on Thursday against a loan modification company that allegedly misrepresented itself in foreclosure rescues services.
The Wisconsin Department of Justice obtained the judgment against the Calif.-based Federal Loan Modification Center LLP, which allegedly took advantage of Wisconsin homeowners in foreclosure danger by telling them the company was part of a federal program designed to help.
The distressed homeowners were told the company had attorneys that would work on their behalf and were asked for an up-front fee for their services, it is alleged.
The company allegedly advised some homeowners to cease communication with their lenders and told others to stop payments all together. FLM collected as much as $3,500 in up-front fees from homeowners but failed to deliver on the services promised, Van Hollen says.
"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.
"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."
Under the judgment, the company is required to pay $105,754 and can no longer engage in any loan modification business in further violation of the law.
This is not FLM's first brush with trouble. In July, the Federal Trade Commission obtained an order against FLM.