RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Ken Cuccinelli announced last week that he has settled with a mortgage loan modification company that allegedly charged illegal advance fees.
American Neighborhood Housing Foundation allegedly charged these fees before attempting to perform any foreclosure rescue services for its clients.
Cuccinelli filed a lawsuit against the Chesapeake-based company in November, alleging that by charging up to $1,050 in advance fees for its foreclosure-rescue services, it violated the Virginia Foreclosure Rescue law.
That law prohibits a supplier of foreclosure avoidance or prevention 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."
More than 1,000 consumers nationwide were allegedly affected by the company's actions.
The suit also alleged that ANHF violated the Virginia Consumer Protection Act by making numerous guarantees that it could stop scheduled foreclosures of consumers' homes.
Cuccinelli alleged that the company's "stoppage" normally only amounted to a temporary delay of the foreclosure proceeding, so its guarantee relied on false promises and deception.
Under terms of the agreement, ANHF will provide $94,388.73 in refunds to 273 affected consumers.
"I am pleased that we were able to reach a reasonable agreement with ANHF that potentially will provide refunds to 273 affected consumers," Cuccinelli said. "I appreciate the company's cooperation in working with us to resolve the claims raised in our recent lawsuit."
ANHF will also pay a $5,000 civil penalty to the state and another $10,000 for costs associated with the litigation.
ANHF also maintained an office in Richmond from November 2007 through October.