RICHMOND, Va. (Legal Newsline) - Virginia Attorney General Ken Cuccinelli announced last Monday that his office has reached a settlement with a Virginia Beach, Va.-based mortgage loan modification company.
Nationwide Loan Modification Bureau LLC allegedly charged illegal advance fees before performing "foreclosure rescue" services for its customers. Cuccinelli first filed suit against Nationwide on July 20, 2010, alleging that the company violated the Virginia Foreclosure Rescue Law by charging customers up to $1,200 in advance fees for services to help prevent or avoid foreclosure.
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 alleges that Nationwide violated the Virginia Consumer Protection Act by failing to follow through on promises to assist consumers in getting modifications on their mortgage loans. The VCPA prohibits suppliers from engaging in false statements, deception, misrepresentations or false promises in connection with consumer transactions.
Under terms of the settlement, a permanent injunction has been granted that prohibits Nationwide from violating the Foreclosure Rescue Law and the VCPA, among other things, by collecting advance fees in connection with services to avoid or prevent foreclosure.
The state was granted a $25,000 judgment against Nationwide for its violations and $21,700 in restitution to provide reimbursement to all consumers that filed complaints for unearned advance fees paid for foreclosure prevention or avoidance services. Nationwide must also pay $7,500 to Cuccinelli's office for the reimbursement of attorneys' fees and costs.
An agreement was also reached with Nationwide's sole member and manager, Jason T. Gillentine, to resolve alleged claims against him regarding his conduct through the company. Pursuant to this agreement, $7,233.33 was recovered by the state to be used towards consumer restitution.
"This settlement results in judgments for the claims raised in our lawsuit against the company," Cuccinelli said. "I am pleased that we were able to address the wrongdoing in this manner, and that we have recovered some money that will be used to provide refunds to distressed homeowners that paid illegal advance fees."