A Cleveland company that offered to help homeowners avoid foreclosure on their homes has been sued by the Ohio Attorney General's office for failing to live up to its promises of debt relief.
According to a report in Crain’s Cleveland Business, the state is seeking full restitution from the Modification Group and its director, Robert Walker.
The complaint filed in Cuyahoga County Common Pleas Court alleges the Modification Group charged homeowners $1,995 or 1% of the mortgage balance with the promise of lowering interest 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 attorney general's office has 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,” Attorney General Michael DeWine said in a statement. “In many cases, homeowners who believed they were doing the right thing to help save their homes ended up in even worse financial situations."
The lawsuit claims violations of Ohio consumer sales and telephone sales laws and other debt adjustment laws. In addition to restitution the attorney general is asking for a fine of $25,000 against Mr. Walker.
