North Carolina Department of Justice
North Carolina Department of Justice
North Carolina Department of Justice
Submit this request

AG Cooper shuts down foreclosure fraudsters

Release date: 8/23/2006

Raleigh: A Charlotte company that targeted distressed homeowners with offers to help save them from foreclosure has been ordered to stop taking consumers’ money, Attorney General Roy Cooper said today.

“This outfit took money from desperate homeowners, promised to help them avoid foreclosure and then left them in the lurch,” said Cooper. “Foreclosure assistance scams kick consumers who are already down, so we’re working to shut down the scammers.”

Wake County Superior Court Judge Gary Trawick today ordered Mortgage Assistance of the Carolinas, Inc., its predecessor, Carolina Mortgage Relief, Inc., and owner and president Alan Steve Seabolt of Charlotte to cease operating while Cooper’s suit against them goes forward. Cooper alleges that both companies and their owner broke state laws against unfair business practices and debt adjusting.

Cooper is seeking to permanently prohibit Seabolt and his companies from continuing their illegal foreclosure assistance services and to require them to cancel all contracts with consumers and pay refunds and penalties.

As alleged in the complaint, Mortgage Assistance of the Carolinas, its predecessor and Seabolt combed courthouse records for the names of homeowners who were facing foreclosure, then sent them a direct mail solicitation claiming, “WE CAN HELP YOU […]WE ARE THE FORECLOSURE CONSULTANTS THAT REALLY CARE!” Many of these homeowners were having trouble keeping up with monthly mortgage payments due to a lay off, illness or death in their family.

When homeowners responded to the mailings, Cooper contends that Mortgage Assistance of the Carolina claimed it had special expertise and a high success rate in saving consumers’ homes from foreclosure. The company collected its fee upfront, typically one month’s mortgage payment, promising to negotiate with mortgage lenders on the homeowner’s behalf. The companies also forbid homeowners to talk to their mortgage company, urging them to let its so-called experts handle all communications with the lenders. In reality, Mortgage Assistance of the Carolinas did little or nothing to help these consumers.

Consumers who complained to Cooper’s office said they rarely heard from the company once they paid their money. A total of 7 consumers have filed complaints with the Attorney General’s Office about Mortgage Assistance of the Carolinas and Carolina Mortgage Relief.

“Not only did these consumers lose money when they could least afford to,” Cooper said, “They also lost precious time they could’ve spent negotiating with their lender on their own and possibly avoiding foreclosure.”

NC Department of Justice y 9001 Mail Service Center Raleigh, NC 27699-9001 y (919) 716-6400

This case highlights the importance of a new law that Cooper pushed last year, Session Law 2005-408, that amended the state law against debt adjusting to make it illegal for foreclosure assistance companies to charge an upfront fee. Shortly before the law took effect Cooper’s office wrote to foreclosure assistance companies doing business in the state to warn them about the new law. The law is set to expire in October 2007, but Cooper plans to urge legislators to make it permanent.

###

Tips for avoiding foreclosure frauds and scams:

  • Beware of so-called foreclosure rescue companies that contact you after the foreclosure has been filed in court and promise to help you in exchange for an up-front fee. It’s illegal to charge an up-front fee for foreclosure assistance services in North Carolina.

  • Steer clear of foreclosure assistance experts who want you to make your mortgage payment to them, or who discourage you from talking to your mortgage company or an attorney.

  • Watch out for equity skimming. This scam happens when a buyer promises to pay off your mortgage if you sign over the deed to your property. The buyer then rents out your home but doesn’t make mortgage payments and the bank forecloses. Remember, signing over your deed does not mean you’re no longer responsible for paying your mortgage.

  • Other scam tip offs: the schemer refuses to put his or her promises in writing, pressures you to sign paperwork you haven’t had a chance to read thoroughly, or offers to fill out the paperwork for you.

  • Report foreclosure scams to Attorney General Roy Cooper’s office by calling 1-877-5-NO-SCAM.

    • What to do if you face foreclosure:

      • First, contact your mortgage lender to explain the circumstances and see if the loan can be restructured or refinanced, or if you can work out a repayment plan. Keep in mind that most lenders don’t want to foreclose because it costs them money.

        • If you can’t work something out with your mortgage lender, contact a reputable non-profit credit and housing counselor for help. For a list of approved housing counselors in North Carolina, call the US Department of Housing and Urban Development at 1-800-569-4287 or visit their website:

        • http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=nc
      • You may also want to consult an attorney. To find a licensed attorney in North Carolina, contact the NC Lawyer Referral Service at 1-800-662-7660.

      • If you have equity in your house, you may be able to avoid foreclosure by selling it. You might also want to consider deeding the property back to your mortgage company.

      • For additional tips, visit www.hud.gov