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Complaints Filed Against Firms that Help Stop Foreclosure

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By : John Cutts    99 or more times read
Regulators in Florida have reported that complaints against foreclosure rescue businesses or those firms specializing in helping borrowers stop foreclosure are still coming in despite new laws designed to weed out illegal activities by such companies. According to authorities, rescue firms and even some law firms specializing in mortgage modifications are charging borrowers with upfront fees.

As the number of foreclosure Hollywood home auctions and foreclosure sales in various markets of Florida increased, the number of rescue companies also jumped considerably in the area. This also led to more cases of fraud wherein these businesses reportedly charged homeowners for services that were not even provided. To stop such practices, legislators in Florida enacted laws that prevent rescue firms from charging upfront fees.

However, recent reports revealed that complaints from homeowners facing risks of losing their homes to Florida foreclosure auctions have increased. Currently, the state's Attorney General's Office has around 2,600 complaints, with 78 of these cases being actively investigated. According to reports, the American Residential Law Group is one of the firms involved in a case with 48 complaints filed against the firm.

Homeowners complained that the firm charged them as high as $3,000 for services that will help stop foreclosure on their properties, including negotiating with lenders. However, homeowners reported that they received hardly any assistance after paying the fees. So far, the Attorney General's Office has five lawsuits ongoing in South Florida and another four in Orlando against firms that offer mortgage modification services.

Meanwhile, the Florida Bar has also addressed the issue, reporting more than 160 cases that involve lawyers. In 2010, the bar was able to close more than 250 loan modification cases and issued sanctions on seven lawyers in 84 cases related to services for preventing properties from getting sold at foreclosed homes auctions. Consumer advocates have weighed in on the issue, stating that the robo-signing controversy has overshadowed the rescue company issue in the past few months.

They added that these rescue firms are still operating in large parts of the state, with most offering services to stop foreclosure without any intention of providing them. They did admit that although cases are still being reported, the frequency has somewhat declined, mainly because of new laws put in place.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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