Va. AG settles with mortgage modifier
RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Ken Cuccinelli announced a settlement on Wednesday with a Chesapeake-based mortgage loan modification company and its owner resolving allegations of charging illegal advance fees.
Cuccinelli's office filed a lawsuit against R.L. Brad Street LLC and Rhonda L. Wyland, the company's sole member/manager, on Aug. 23. The defendants allegedly violated the Virginia Foreclosure Rescue law by charging as much as $3,000 in advance fees to consumers for foreclosure prevention or avoidance services.
The law prohibits foreclosure avoidance or prevention service providers from receiving or charging fees before the full and complete performance of the services it has agreed to perform unless the transaction involves the transfer or sale of residential real property.
R.L. Brad Street also allegedly violated the Virginia Consumer Protection Act in some instances by failing to follow through on promises to help consumers obtain mortgage loan modifications. The VCPA prohibits suppliers from engaging in misrepresentations, false promises, false statements and deception related to consumer transactions.
Cuccinelli obtained court approval in May to add Wyland as an additional defendant in the matter. Cuccinelli said that Wyland should be held responsible for R.L. Brad Street's alleged VCPA violations because, among other reasons, all payments were deposited directly to her personal bank account and were commingled with her other assets. In addition, Wyland allegedly actively participated in the violations.
Under the terms of the settlement, a permanent injunction has been put into place that prohibits the defendants from violating the VCPA and the Foreclosure Rescue law, the defendants agreed to another permanent injunction prohibiting them from engaging in any Consumer Financial Protection Bureau Mortgage Assistance Relief Services Rule violations, and the state is granted a $32,900 judgment of restitution for consumers, $25,000 in civil penalties and $5,000 for attorney fees and costs.
"This settlement results in judgments for the claims raised in our lawsuit against the company, and its owner, for their alleged violations of the Virginia Consumer Protection Act, including the Foreclosure Rescue law," Cuccinelli said. "This resolution will send a strong message that we will continue to pursue those who prey on Virginia's most vulnerable citizens."