Following up on an initiative kicked off earlier this year, the office of Washington State Attorney General Rob McKenna has once again acted to shut down an illicit mortgage lender's operations.
Florida-based United Home Savers was combing online databases of homeowners in various stages of foreclosure, and collecting cash upfront to keep their homes off the auction block. Then, the state says, the company simply took the money and ran.
"United Home Savers is a misnomer," Attorney General Rob McKenna said in a statement. "The company promised to rescue homeowners from foreclosure while looting the emergency change jars of families already at high risk of losing their homes."
The Attorney General's Office accused United Home Savers, LLP, of Clearwater, Fla., and owners Stephanie and Darin Dietschy, of Belleair Beach, Fla., of violating Washington's Consumer Protection Act, Credit Services Organization Act and Commercial Telephone Solicitation Act.
The company is now out of business. Owners did not admit any liability, but agreed to a consent decree that prohibits them from engaging in alleged violations in the future.
Foreclosure rescue scams have become an increasingly serious threat to homeowners as the number of foreclosures rise in Washington. The Attorney General's spokeswoman says they're working to protect consumers through education and enforcement action.
The office's Consumer Protection Division settled a case in April involving similar allegations against Foreclosure Assistance Solutions, also based in Florida.
Last month, McKenna's office mailed more than 14,000 letters to homeowners whose addresses appeared in public foreclosure listings. The office also partnered with county treasurers to include the letters with certified foreclosure notices sent to those who have neglected to pay property taxes.
According to the state's civil complaint and the settlement, filed today in Spokane County Superior Court, United Home Savers advertised to Washington homeowners that the company can rescue homeowners from foreclosure. The company charged $1,200 or more up front and promised a refund if their services weren't successful.
But Assistant Attorney General Jack Zurlini said the majority of homeowners received little or no help, and the company routinely refused or failed to refund money.
"The company's service contract was a trap," Zurlini said. "Consumers were entirely dependent on United Home Savers to fulfill its promise to save their homes and were unable to check with their lender to see if the business has even contacted them."
According to the contract, customers who contacted their financial institutions would forfeit their $1,200 payment and receive no further services from United Home Savers.
United Home Savers is also under fire from the Federal Trade Commission in a lawsuit filed in U.S. District Court for the Middle District of Florida. The Attorney General's Office assisted the FTC with its investigation.
The FTC has obtained a preliminary injunction against United Home Savers and its owners and is seeking restitution on behalf of all consumers who have lost money. If the federal court doesn't allow the FTC to pursue restitution, then McKenna says he may petition the Washington state court for refunds for Washington consumers.
The state's consent decree also imposes $100,000 in civil penalties that are suspended provided the defendants comply with the settlement terms.
Free foreclosure and homeownership counseling is available at www.homeownership.wa.gov or by contacting the Washington State Homeownership Information Hotline at 1-877-894-HOME (1-877-894-4663). Additional resources are listed on the attorney general's website at www.atg.wa.gov/foreclosure.aspx.