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| A North Carolina-based mortgage default assistance company has found itself in hot water with state attorneys general across the country. Consumers claim the company takes their money but does not negotiate lower mortgage payments, as promised, with their lenders. HomeSavers USA is presently facing a lawsuit in Illinois brought by Illinois Attorney General Lisa Madigan. The company has already settled with attorneys general in Missouri and Idaho and recently stopped offering its services in North Carolina because of a law spearheaded by North Carolina’s attorney general that requires companies to complete work before collecting a fee. In the last three years, 63 customers in 27 states have reportedly filed complaints against the company with a local Better Business Bureau. The BBB has given the company an unsatisfactory rating “due to a pattern of complaints and has failed to correct the underlying reason for the complaints. Complaints concern the company’s failure to provide services as promised in its written contract/agreement,” the BBB wrote on its Web site. Through its Web site, HomeSavers USA encourages people to call if they fall behind on their mortgage payments. The company says it will attempt to negotiate a new debt payment schedule with the mortgage company holding the loan. The Illinois lawsuit claims that the company, while claiming to help homeowners facing foreclosure, charged homeowners to negotiate with lenders but did not perform the service. The suit seeks a $50,000 fine, refunds for customers and to prevent HomeSavers from doing business in that state. North Carolina borrowers filed fifteen complaints against the company, the largest number in any state. That, combined with complaints about similar companies, prompted N.C. Attorney General Roy Cooper last year to push for new restrictions on such companies. State law now prohibits such companies from collecting a fee before completing their work, among other things. As a result, HomeSavers earlier this year stopped doing business in North Carolina. In Missouri, Attorney General Jay Nixon obtained an agreement with HomeSavers in 2004 after consumers complained about the business. Two consumers told the Attorney General that HomeSavers promised to work with their mortgage company to lower their payments. HomeSavers reportedly contacted the consumers’ mortgage company and tried to work out lower payments but was unsuccessful. HomeSavers USA agreed to pay $830 in restitution to the two customers. And, in an agreement approved by a Missouri circuit judge, HomeSavers USA agreed to comply with the Missouri Merchandising Act. This includes giving consumers three days to rescind a contract and asking for payment only after work has been completed. Similar allegations led to a settlement with the state of Idaho in 2002. HomeSavers USA did not return calls for comment. | |
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Lisa D. Burden is a legal analyst for MortgageDaily.com and holds a law degree from the University of Maryland. She is currently a freelance journalist who previously wrote for Institutional Investor publications and the Baltimore Daily Record. e-mail Lisa at: burdenlisa@yahoo.com |
