Florida AG Continues Cranking Out Lawsuits Against Upfront Fee Loan Modification Firms

In Fort Lauderdale, Florida, the South Florida Sun Sentinel reports:

• Attorney General Bill McCollum sued a South Florida loan modification firm and its affiliated companies this week, alleging they violated state law by charging fees for foreclosure rescue services. The civil lawsuit was filed in Broward County Circuit Court on Thursday, against Keep Your Property, its owners William R. Colon and Carlos A. Hernandez, and Centro de Prevencion y Educacion Corazones Unidos H.I. Visida Inc., a nonprofit organization, and Economic Alliance Group.

• The suit alleges they violated state laws prohibiting deceptive and unfair trade. Colon and Hernandez couldn't be reached to comment. Consumers told state investigators that they paid an upfront fee of $2,200 and monthly fees of $550(1) after the company guaranteed to file all the paperwork required to prevent foreclosure action or lower mortgage payments.(2) But many consumers found later that the company failed to contact lenders and take any action on behalf of homeowners.

Source: State sues South Florida home loan modification firm over fees.

For more from the Florida Attorney General's Office, see:

• Press release: McCollum Obtains Injunction Against South Florida Loan Modification Company,
• Lawsuit: State of Florida v. Keep Your Property, Inc., et al.
• Consumers who wish to file a complaint about the company may do so by filing an affidavit with the Attorney General’s Office. A form and instructions is available online here.

(1) The lawsuit alleges that the fee was for “membership” with KEEP YOUR PROPERTY, INC. This “membership” fee is a device by which Defendants seek to evade the requirements of Florida Statute §501.1377, according to the suit. See Lawsuit - paragraph 27.

(2) The lawsuit also alleges that Defendants’ business in offering legal services to the public directly, or indirectly through Florida licensed attorneys which Defendants engage or otherwise involve and/or compensate, constitutes the unauthorized practice of law in accordance with the principles of the Florida Supreme Court pursuant to The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So.2d 797 (1980); and that Defendants solicited, advertised or otherwise offered legal services to Florida homeowners for mortgage foreclosure defense and/or foreclosure-related rescue services, and made it a business to solicit or procure legal business for attorneys, in violation of Florida Statutes, §877.02(1). See Lawsuit - paragraphs 31-36. UnauthPractOfLawTheta