AG Cooper moves to stop phony foreclosure assistance scheme
Release date: 5/17/2011
Forsyth County operation makes promises to save homes but fails to deliver
Raleigh: A Winston-Salem foreclosure rescue operation that targeted financially distressed homeowners with claims to help them save their homes from foreclosure is barred from collecting any money from consumers for foreclosure assistance or loan modifications, Attorney General Roy Cooper announced.
“This kind of scheme robs struggling homeowners of valuable time and hard-earned money that could be used toward legitimate help that could put them back on their feet again,” Cooper said. “My office will continue to target outfits that violate the law by charging an upfront fee for their service.”
Last week, Wake County Superior Court Judge Howard Manning agreed with Cooper’s request to temporarily bar Edward “Eddie” Phillip Long, Jr., doing business as Credit Enhancement Services, from offering foreclosure and loan modification services, and from charging advance fees for credit repair and credit score improvement services. Cooper is seeking to permanently shut down Long’s foreclosure assistance business and win consumer refunds and civil penalties.
As alleged in the complaint,
Long advertised his foreclosure assistance and credit repair services through word-of-mouth advertising, in-person presentations and seminars at community centers and churches, appearances on local radio broadcasts and online. According to evidence gathered during the investigation, Long claimed that he had extensive experience in the banking industry, including formerly serving as a bank executive at a major bank, and that he was a professor of finance at North Carolina A&T University, neither of which were true.
Cooper’s complaint alleged that Long promised to obtain favorable loan modifications and save customers’ homes from foreclosure for an upfront fee ranging from $500 to $1000. Under North Carolina law, it’s illegal to charge an advance fee for foreclosure assistance or loan modifications, a change Cooper fought for in 2005.
In some instances, Long told customers that he had a “90% success rate” and would refund all of their money if he was unable to save their home. Based on complaints to Cooper’s office, Long did little or nothing to stop homeowners from losing their homes and when they asked for refunds they were ignored.
Six consumers have filed complaints about Long and Credit Enhancement Services with the Attorney General’s Consumer Protection Division. The following consumer account, taken from affidavits filed with the suit, illustrates Long’s tactics:
- A Lexington father fell behind on his mortgage after his wife lost her job prior to having their second child. He contacted his mortgage company to attempt to qualify for a loan modification but in the meantime was served a summons for a foreclosure hearing. After hearing a segment on a popular radio station featuring Eddie Long of Credit Enhancement Services he set up a meeting. The couple met with Long, who told them he had been able to get loan modifications “90% of the time” and guaranteed them they would not lose their home. He told them the fee for his service was $995 and they paid him $500 upfront and then made payments for the remaining amount. After several weeks of checking in with Long who said he was working on a loan modification, the couple received an eviction notice. The couple’s home was sold and they had to move in with family. The couple has not received a refund from Long.
If you suspect fraud by a foreclosure rescue company or if you have been charged upfront fees, call my Consumer Protection Division toll-free at 1-877-5-NOSCAM. North Carolina homeowners can also call a toll-free hotline set up by the NC Commissioner of Banks’ Office for free counseling on options to avoid foreclosure. The hotline, 1-866-234-4857, is available from 8:00 AM to 9:00 PM Monday through Friday, and from 8:00 AM to 5:00 PM on Saturdays.
“Free help is available to all North Carolina homeowners facing foreclosure,” Cooper said. “Before you throw away your money on a foreclosure relief scam, get free help from qualified housing counselor in your area.”
Tips on how to spot a foreclosure scam are available on the Attorney General’s website, www.ncdoj.gov
Contact: Jennifer Canada, (919) 716-6413