Va. AG settles with mortgage loan modification company

Bryan Cohen Aug. 29, 2011, 1:10pm


RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Ken Cuccinelli announced a settlement on Thursday with a Virginia Beach, Va.-based mortgage loan modification company for allegedly charging illegal advance fees.

Real Estate Resolutions LLC allegedly charged illegal advance fees before performing foreclosure rescue services for its company and must provide refunds to affected customers. The settlement prohibits the company from collecting advance fees.

Cuccinelli previously filed suit against RER on July 19, 2010, alleging that the company violated the Virginia Foreclosure Rescue law by charging advance fees of up to $994 in connection with services to prevent or 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."

Cuccinelli also alleged that RER violated the Virginia Consumer Protection Act when it failed to follow through on promises to assist consumers in obtaining modifications of their mortgage loans. The VCPA generally prohibits suppliers from using any deception, fraud, false pretense, false promise or misrepresentation in connection with a consumer transaction.

As part of the settlement, the commonwealth was granted a permanent injunction prohibiting RER from future violations of the VCPA and the Virginia Foreclosure Rescue Law by, among other things, collecting advance fees in connection with services to avoid or prevent foreclosure. In addition, RER agreed to provide refunds totaling $1,560 to five consumers, reimburse the unearned portions of advance fees paid to the company, compensate the commonwealth $2,500 for attorneys' fees and pay the commonwealth $2,500 as a civil penalty.

"This is the third settlement we have reached with a mortgage loan modification company that allegedly charged illegal advance fees," Cuccinelli said.

Cucinelli previously settled with Nationwide Loan Modification Bureau LLC and American Neighborhood Housing Foundation, two mortgage modification companies from the Tidewater region of Virginia, for allegedly charging illegal advance fees in connection with services to avoid or prevent foreclosure.

The consent judgment was submitted for approval to the Virginia Beach Circuit court on August 23.

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