Broken Foreclosure Rescue Promises Equate To Penalties

April 25th, 2008

The story of broken foreclosure rescue promises is common across the nation. But in Washington it has equated to penalties in the form of refunds. A business concern that has gone defunct did nothing after making tall promises to foreclosure victims assuring them of help. Today the company has been compelled by legal pressure to make partial amends by refunding some of the amount siphoned off their clients. The settlement was made at the office of the Attorney General of the state. The firm – Foreclosure Assistance Solutions of Clearwater however did not admit to having done anything wrong. The same company was involved in a similar deal in Texas a month ago.

According to paper filed on Monday in the Superior Court of Spokane County, the company (at present defunct) agreed to return $78,125 approximately to each of its 200 customers. Roughly they would get back per head $300 to $500. The office of the Attorney General would be given $20,000.

Rob McKenna, the Attorney General said that the house owners gave the dubious company money ranging from $1,200 to $1,500. Even after having done so more than 70% of its clients could not save their houses. One of the legal representatives of the company, Kathryn McKinley was not available for discussion.

According to the FBI there has been an increased reliance on third party brokers and this has encouraged the growth of fraud particularly in the mortgage industry. The tricky part is that mortgage professionals are involved in it. Combating mortgage fraud is of prime importance because of its direct effect on the general economy of the nation. Thus all the mortgage fraud operations have been brought under Financial Institution Fraud Unit. This makes investigation more effective and forceful without the least possible wastage of time. The mortgage industry by and large does not have any rules regarding mandatory fraud reporting. This has made it easy for first time mortgages to be re-packed and sold in secondary markets. Taking advantage of this mayhem where the hapless borrowers are at the receiving end, vultures are descending to pick the bones of the half dead foreclosure victims. The latter are in such a traumatized state that they cannot sift the enemy from the friend. As such they easily fall into the trap and lose whatever they have left. It is the senior citizens, the minorities and those not fully conversant with English who have been the easiest victims.

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