Va. AG settles with loan modification company
RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Ken Cuccinelli announced a lawsuit on Thursday against a Chesapeake, Va.-based mortgage loan modification company for allegedly charging illegal advance fees for its "foreclosure rescue" services.
Cuccinelli alleges that R.L. Brad Street LLC violated the Virginia Foreclosure Rescue Law by charging advances fees in connection with services or to avoid foreclosure. Section 59.1-200.1 of the foreclosure rescue law prohibits a supplier of foreclosure prevention or avoidance services from "charging or receiving a fee prior to the full and complete performance of the services it has agreed to perform, if the transaction does not involve the sale or transfer of residential real property."
R.L. Brad Street allegedly collected fees of up to $3,000 in the form of checks made payable to Rhonda Wyland, the company's member/manager, from consumers before performing any services for them.
Cuccinelli also alleges that the company violated the Virginia Consumer Protection Act by failing to deliver on promises to assist customers in obtaining modifications to their mortgage loans. The VCPA generally prohibits supplier from using any fraud, deception, false promise, misrepresentation or false pretense in connection with a consumer transaction.
"In these difficult economic times, the last thing distressed homeowners need is to be cheated out of large sums of money that could otherwise be spent meeting pressing financial obligations," Cuccinelli said. "The advance fees collected should be refunded where services have not been completely performed."
The lawsuit requests that the court enjoin R.L. Brad Street from violating the VCPA and that fees paid be returned to consumers where services were not completely performed. The suit also seeks civil penalties of up to $2,500 for each violation.