Arizona Mortgage Lawsuit Scam

On Monday August 22nd, 2011 in Phoenix, Arizona Attorney General Tom Horne issued a warning to consumers to be wary of any notices or advertisements that claim to offer homeowners facing foreclosure “complete forgiveness of the loan” or other monetary relief if they join a class-action lawsuit.  Such ploys are likely a pretext to collect illegal up-front fees for foreclosure assistance.

“The mortgage crisis is only made worse by predators who take advantage of consumers who are already facing the loss of their home,” Horne said.  “State and federal law ban almost all types of up-front fees for foreclosure assistance. I am committed to prosecuting anyone who engages in this type of consumer fraud, and it is just as important that consumers be vigilant against these types of scams.”

In California recently lawsuitshave been filed against California attorney, Philip Kramer, the Law Offices of Kramer & Kaslow, plus 19 other individuals and companies for deceptive marketing. It is believed the defendants have take over $7 million in fees from homeowners in 17 states, including Arizona.

Notices may be mailed to homeowners or posted on their doors. Typically, the business claims that the fee they are charging is for a forensic audit of your loan documents to see if you are eligible to join the class action litigation.  However, the Federal Trade Commission’s Mortgage Assistance Relief Services Rule (“MARS Rule”) contains a broad ban on requesting or collecting up-front fees for almost all types of mortgage assistance, including forensic audits related to foreclosure relief.  Arizona’s foreclosure consultant statute also prohibits companies from collecting an up-front fee for assisting homeowners in foreclosure. 

If you feel you’ve been a victim of an Arizona mortgage scam or any other type of consumer fraud, please contact the Arizona Attorney General’s Office Consumer Information & Complaints Unit at (602) 542-5763 / (520) 628-6504 / (800) 352-8431.

If you or someone you know maybe facing a possible foreclosure, please contact me today. There are options and we can help. A short sale is a complex process – one that requires the skill of a professional who is educated and understands how the process works. Don't fall victim to a mortgage scam because you need help - call me today.

Source: Arizona Department of Real Estate-Informational Alert 8.23.2011