NC joins nationwide mortgage-relief crackdown

North Carolina Attorney General Roy Cooper said Wednesday he is suing a California mortgage-relief company for collecting illegal upfront payments, joining a nationwide sweep against such businesses by regulators and other states.

Cooper said he is suing Remedy Center Law of Newport Beach, Calif., which does business as Home Remedy Center, and owner Pamela Gerber-Gressier of Huntington Beach, Calif. According to Cooper, the company violated North Carolina law by charging upfront fees for foreclosure assistance.

Home Remedy “did little or nothing” to help homeowners who were charged as much as $4,999 apiece to have their loans modified, according to Cooper.

“Homeowners desperate to make their mortgage payments deserve real help, not empty promises,” Cooper said in a statement.

Cooper’s Consumer Protection Division said it heard from 10 consumers about the scheme.

Home Remedy could not be reached for comment.

Cooper’s lawsuit is part of “Operation Mis-Modification,” an effort involving federal authorities and 15 states to crack down on foreclosure-relief companies accused of using deceptive marketing to prey on distressed homeowners.

The Consumer Financial Protection Bureau and Federal Trade Commission on Wednesday announced their own actions against companies and individuals accused of collecting millions in fees combined.

The CFPB and FTC say the mortgage relief operations violated a federal regulation that bans upfront payments for mortgage modifications before a consumer has signed a modification agreement from their lender.

The CFPB also claims that some operations violated the Dodd-Frank financial overhaul law, which generally prohibits deceptive practices targeting consumers.

According to Cooper, Home Remedy Center claimed its lawyers would help homeowners avoid foreclosure or lower their mortgage payments by negotiating with their mortgage company.

Homeowners never received successful loan modifications and in some cases the paperwork they filled out wasn’t even sent to their mortgage company, Cooper said. Homeowners complained that after they paid upfront fees it was nearly impossible to get in touch with Home Remedy, which would not give them refunds, Cooper said.

Cooper said he is asking Wake County Superior Court to bar the company from operating in North Carolina and order it to pay refunds to consumers and civil penalties.