The Ohio Attorney General's office has sued a Cleveland company that offered to help homeowners avoid foreclosure but failed to deliver on its promises of debt relief.
The lawsuit again the Modification Group and its director, Robert Walker, alleges the defendants charged homeowners $1,995 or 1% of the mortgage balance with the promise of lowering interests rates and/or eliminating late payment charges. The company's contract pledged to refund 80% of the upfront cost if it couldn't deliver the promised savings. The lawsuit seeks full restitution.
The lawsuit filed in Cuyahoga County (Ohio) Common Pleas Court claims the defendants violated Ohio consumer sales and telephone sales laws and other debt adjustment laws. Along with restitution, Attorney General Mike DeWine's office is asking for a fine of $25,000 against Walker.
A statement from the attorney general's office said it had received 72 complaints against the company since December 2009.
"Consumers said they paid advance fees for help reaching a loan modification, but never received the promised help," DeWine said in the news release. "In many cases, homeowners who believed they were doing the right thing to help save their homes ended up in even worse financial situations."
