SaveMyHome USA, Payment Doctors and the Michigan Economic Reinstatement Program were held accountable after an undercover investigation by the Michigan Attorney General’s office who discovered that the companies’ representatives made misleading statements and charged borrowers upfront fees in violation of the Michigan Credit Services Protection Act. Michigan residents victimized by the foreclosure fraud schemes can receive refunds as a result of the charges filed.
The companies offered mortgage modification assistance to homeowners facing foreclosure. They claimed they would help homeowners by working with their lenders in an attempt to modify the borrower’s mortgage. An undercover investigation by Attorney General Mike Cox’s office discovered that the companies charged borrowers upfront fees, a practice prohibited by law. After paying the upfront fee, many borrowers found that the companies could not secure a modification and were subsequently unable to get their money back.
Each company pleaded no contest to one count of violating the Michigan Credit Services Protection Act. They also agreed to provide the Attorney General’s office with customer lists that will be used to determine how many customers are entitled to restitution for fees paid for services that were never provided. Further, the companies have agreed to have all their employees sign an acknowledgement of their responsibilities under Michigan law and the penalties for possible violations. Final sentencing hearings will be scheduled in the next 30-60 days, during which companies could be subject to fines.
While the companies are based in Southeastern Michigan, it is believed they had customers around the state.
Attorney General Cox urges any consumers who paid fees to SaveMyHome USA, Payment Doctors, the Michigan Economic Reinstatement Program, or any other mortgage modification company for services that were not provided, to contact the Attorney General’s Consumer Protection Division at (877) 765-8388.
Cox reminds homeowners they can find foreclosure information on his website at www.michigan.gov/avoidforeclosure. The website includes contact information for government agencies and debt counselors, and also offers tips for those facing foreclosure, including:
* Homeowners are never required to pay to speak with their lender or servicer.
* Homeowners do not need to pay for outside assistance. Free assistance with foreclosure issues can be found by calling the Michigan State Housing Development Authority at (866) 946-7432.
* If you do hire outside assistance, never pay up front for help with negotiating your loan or working with your servicer.
Attorney General Cox has made prosecuting mortgage fraud a priority for his office. In 2008, Cox created a mortgage fraud unit, teaming with the Michigan State Police and other law enforcement agencies to tackle consumers’ complaints. Cox’s office has charged 21 people or companies with a mortgage fraud-related offense in the last 12 months alone.
Cox’s office also conducted several mortgage foreclosure forums to help families stay in their homes during these difficult times.
“Families already facing a foreclosure crisis should not have to worry about being ripped off in the process,” said Cox. “This sends a clear message to scam artists that we are watching.”