North Carolina officials have shut down a company they claimed was preying on homeowners who were behind on their mortgage payments, sending them direct mail offers of help.
“We can help you … we are the foreclosure consultants that really care!” the company promised, according to Attorney General Roy Cooper. Instead, Cooper said, Mortgage Assistance of the Carolinas Inc. collected an upfront fee — typically one month’s mortgage payment — “and then left them in the lurch.”
Cooper has filed suit against Mortgage Assistance and its predecessor, Carolina Mortgage Relief Inc., and owner Alan Steve Seabolt of Charlotte. The complaint alleges both companies broke state laws against unfair business practices and debt adjusting. A Wake County Superior Court judge Wednesday ordered the company to cease operations while the suit moves forward.
North Carolina lawmakers last year passed a law making it illegal for foreclosure assistance companies to charge an upfront fee, and Cooper’s office wrote companies doing in the state warning them about the change before it took effect.
After collecting an upfront fee, Mortgage Assistance allegedly promised to negotiate with lenders on its customers’ behalf, forbidding them to talk to their mortgage holders themselves. The company in fact did little or nothing to help its customers, Cooper alleges, and seven filed complaints with his office.
Foreclosures are on the upswing in North Carolina, more than quadrupling in Mecklenburg County between 1999 and 2005, The Charlotte Observer reported. Some 2,800 homes went into foreclosure there last year, the paper said.
Another Charlotte-based company, HomeSavers USA Inc., faces similar charges in Illinois. HomeSavers has also settled mortgage rescue complaints in Missouri and Idaho, the Observer reported.