New York Attorney General Andrew M. Cuomo's office is sending more than 30 new cease-and-desist letters to mortgage rescue companies, warning them to immediately end all misleading and illegal conduct.
The office has now sent similar letters to a total of 213 companies as a part of an ongoing investigation into mortgage rescue companies.
The investigation has revealed many companies are collecting illegal upfront fees from homeowners on the verge of foreclosure, but then fail to help them lower their payments or save their homes as promised, according to the AG's office, which stated that thousands of New Yorkers have been affected by such scams.
The letters sent to the companies warn the companies to end any illegal, deceptive, and misleading practices, including: charging upfront fees for consulting services; failing to enter into written contracts with homeowners, in the language the homeowners use, that fully disclose the exact nature of, and fees for, the services to be provided; and failing to allow homeowners to cancel their contract, without any penalty, within five business days after signing and failing to provide homeowners with notice of this right in the contract.
The letters also warn against: using any deceptive and misleading advertising practices, including: false guarantees regarding success rates, false 100% money-back guarantees, and fabricated consumer testimonials; and using any advertisements designed to give consumers the false impression that a company is affiliated with the government or a government-sponsored program.
After sending cease-and-desist letters to more than 180 mortgage rescue companies last week, the AG's office received consumer complaints and uncovered more evidence that indicated other companies may be abusing New York homeowners.
Mortgage rescue companies target homeowners facing foreclosure by claiming to be able to modify home mortgage loans and lower monthly payments.
“The letters that we are sending out to mortgage rescue companies across the United States intend to stop bad companies in their tracks,” said Cuomo, in a prepared statement. “Many of these companies
take money from homeowners who cannot afford to pay it and make a bad situation worse. We are telling these companies to immediately cease any wrongdoing and to make sure their business practices are all aboveboard, or they are going to be held accountable.”
As of May 2010, there are 64,778 foreclosed properties in New York, according to Cuomo's office.
