Indiana Attorney General Cracks Down on Foreclosure Companies

This past week ""Indiana Attorney General"":http://www.in.gov/attorneygeneral/ Greg Zoeller filed lawsuits against three for-profit foreclosure companies, claiming they have not complied with the state's statutes by demanding money up-front for services not yet performed.

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Zoeller has formed a Homeowner Protection Unit (HPU) meant to track down foreclosure consultant companies that may be operating illegally in Indiana or are failing to comply with Indiana's new laws meant to protect consumers.

""Indiana requires strict compliance with statutes meant to protect consumers. We don't want to wait for someone to tell us they lost their home because they gave their last

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dime to a foreclosure consultant,"" Zoeller said. He continued, ""Foreclosure consultants pose a serious risk to the financial stability of hundreds of homeowners and protecting consumers means stopping them before they have a chance to hurt people.

Lawsuits were filed against FHAAllDay.com, Home Loan Modification, Foreclosure Relief Services, Inc. and Patrick Kirby.

In Indiana, a foreclosure consultant company or credit service organization must have a $25,000 surety bond registered in the attorney general's office before it can demand payment for services not yet performed. The bond will then act as an insurance policy for consumers in the event the company fails to provide the services or a refund.

The HPU has filed 16 lawsuits this year, with six settlements already against foreclosure consultants. More than 150 consumer complaints against foreclosure consultants are currently being investigated by the attorney general's office.

Consumer complaints against foreclosure consultants have risen dramatically since 2009.

Homeowners looking to avoid foreclosure are encouraged to work with a certified not-for-profit housing counselor to determine their options.