Indiana attorney general takes action against foreclosure management company

Posted on : 16-05-2010 | By : Joshua Parker | In : Credit Cards Articles

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SOUTH BEND — Steve Garcia was at one of the lowest points in his life.

His deteriorating health had led to blindness in one eye and the inability to work. His marriage was suffering. His home was nearing foreclosure.

So when the Mishawaka man received a card in the mail for an apparent foreclosure-aid company promising help and counseling, Garcia believed his luck might be changing.

“Everything had snowballed,” remembered Garcia’s daughter Candace Garcia. “It was his last hope, his saving grace.”

But instead of pulling Garcia to safety, the company, USA Mortgage Aid Inc., allegedly exploited his misfortune and duped him out of $1,700.

Now, Indiana Attorney General Greg Zoeller has filed a lawsuit on Garcia’s behalf against the company, a purported business that Zoeller says has swindled hundreds of Indiana residents out of hard earned money.

Zoeller was in South Bend today to file the suit in the St. Joseph County clerk’s office and also to urge residents to beware of likewise scams.

Since the foreclosure crisis, many businesses have popped up, touting themselves as “mortgage rescue,” companies,” Zoeller said. The M.O. is usually the same: money up front, help later.

In Garcia’s case, he was asked to sign a “counseling agreement,” and required to pay two installments of $850.

But, Zoeller said, USA Mortgage Aid Inc. violated several state consumer protection laws by demanding the money and by not being properly bonded. The attorney general’s office also accuses the company of misrepresenting its positions and lying to consumers about having in-depth industry knowledge.

Like many who have been victimized, Garcia said he determined the business had taken advantage of him after months went by with no action. He then called his mortgage company, which said it had never heard from the foreclosure-aid company.

According to the California secretary of state website, USA Mortgage Aid, based in Irving, Ca., is now a dissolved company.

A phone number listed on a flier for USA Mortgage Aid Inc. was out of service Thursday. A website for the company includes a message reading that the company is “no longer accepting new clients or applications.”

An e-mail to the company was not returned Thursday.

Zoeller said he plans to aggressively pursue litigation against the company and that he hopes the lawsuit is also a message to all other similar “businesses.”

“Word should go out; Indiana is a very unfriendly place for scammers,” he said.

Zoeller stressed that help does exist for residents anticipating upcoming home foreclosure. Homeowners should search their options, he said, and be wary of any companies that ask for money upfront.

Garcia said he hopes that by coming forward with his story, he might help other families from having to go through the same ordeal.

For more information

The Indiana attorney general’s office is partnering with several other organizations to host a workshop on foreclosure alternatives. The free workshop includes professionals in the housing industry such as counselors, Realtors and lenders.

The workshop will be at 2:30 p.m. Tuesday at the WorkOne Center, 851 S. Marietta St. in South Bend. Registration is not required. For more information, call (317) 234-7093.