Friday, December 14, 2007
Attorney General Abbott Takes Legal Action Against Foreclosure Rescue Firm's Unlawful Texas Operations
Clients of Abell Mediation, Inc. urged to call their lenders immediately
CORPUS CHRISTI – Texas Attorney General Greg Abbott took
legal action Thursday against an unlawful Arizona-based foreclosure
rescue operation that targeted struggling Texas homeowners.
According
to court documents, Abell Mediation, Inc., and its president and
vice-president, Elizabeth Cory and Michael Cory, respectively,
fraudulently advertised that the company could save homeowners from
imminent foreclosure. The enforcement action seeks a temporary and
permanent injunction stopping the defendants from falsely soliciting
distressed Texas homeowners.
| Media links | |
 Abell Mediation Web Site |  Sample Deceptive Letter |
| Attorney General's lawsuit against Abell Mediation | |
“At
a time when regulators, policy makers and stakeholders are working to
help struggling families, unscrupulous operators are scheming to
profiteer at homeowners’ expense,” Attorney General Abbott said. “These
defendants charged large fees and failed to deliver on their false
promises. This legal action seeks to shut down an unlawful scheme to
defraud Texas homeowners.”
Attorney General Abbott added:
“Homeowners facing difficulty making their monthly mortgage payments
should be wary of mortgage rescue scams. Schemes offering
too-good-to-be-true solutions are usually just that. Texans who fall
behind on their payments should contact their lender directly to work
out a resolution.”
According to the attorney general’s
enforcement action, homeowners who were delinquent on mortgage payments
responded to the defendants’ solicitation cards and Web site. The cards
claim that “Abell Mediation, Inc. has saved over 7000 homes from
foreclosure.” The solicitation also boasts that Abell Mediation, Inc.’s
“staff of highly trained loss mitigation specialists” has established
relationships with mortgage lenders and banks nationwide and can
“achieve results that no one else can.” The defendants also told
homeowners that they would only accept clients whom they could help.
Homeowners
who contacted Abell Mediation, Inc. were pressured to pay fees between
$800 and $1,200 immediately. Abell Mediation, Inc. strictly prohibited
homeowners from contacting their mortgage lenders. After homeowners
paid the fees, many never heard back from the defendants’
representatives and often lost their homes anyway.
The attorney
general’s legal action seeks to prohibit the defendants from making
false representations to homeowners and deceiving potential clients
about the services they provide. The Attorney General also seeks
court-ordered restitution for homeowners who were harmed by the
defendants’ acts, as well as civil penalties of up to $20,000 per
violation of the Texas Deceptive Trade Practices Act. Additionally, the
Attorney General requests up to $5,000 per violation for the
defendants’ failure to register their business as one that conducts
telephone solicitations.
Attorney General Abbott reminded the
company’s customers that they should not wait for Abell Mediation, Inc.
to contact them about the status of their mortgages. Homeowners need to
call their lenders immediately and ask what preventative measures, if
any, the defendants have taken on their behalf.
The Office of
the Attorney General is engaged in a variety of efforts to protect
Texas homeowners. In October, Attorney General Abbott secured a
temporary injunction against Foreclosure Assistance Solutions, a
Florida-based “foreclosure rescue” scheme that targeted Texans who fell
behind on their mortgage payments. He also took action against Southern
Residential, LLC, a Texas-based foreclosure rescue outfit engaged in
similar practices.
In September, Attorney General Abbott
launched the Texas Residential Mortgage Fraud Task Force, a partnership
that involves key state regulatory agencies to take a proactive stance
towards tracking and prosecuting mortgage fraud.
Last month,
Attorney General Abbott urged three of the largest mortgage lenders and
servicing companies doing business in Texas to take steps to address
the high foreclosure rates in the state. In meetings with EMC Mortgage,
Countrywide Mortgage and Litton Loan Servicing, he outlined five
measures that the companies should implement to restore borrowers’
financial stability, including stepping-up efforts to convert
adjustable rate mortgages to fixed-interest loans; subjecting more
delinquent loans to mitigation first rather than immediately submitting
them to an antagonistic collections process; improving communication
and outreach with consumers; waiving penalties and fees while companies
work with troubled homeowners; and promptly addressing complaints filed
against them with the Office of the Attorney General.
Earlier
this year, Attorney General Abbott secured $21 million in restitution
for Texas homeowners who were harmed by lending giant Ameriquest
Mortgage Co. That case resolved allegations that the company and its
affiliates did not clearly disclose certain terms to homeowners,
including unpredictable adjustable rates.
Homeowners who believe
they have been harmed by this or similar fraudulent businesses may call
the Office of the Attorney General’s toll-free complaint line at (800)
252-8011 or file a complaint online at www.oag.state.tx.us.
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