North Carolina AG Shuts door on Foreclosure Fraudsters
Roy Coooper, the AG of North Carolina announced that his office has shut down Mortgage Assistance of Carolinas, Inc. Mortgage Assistance is alleged to have preyed upon consumers whose mortgages were in default. Mortgage Assistance claimed that for an upfront fee it would negotiate with the consumer's bank and prevent the foreclosure. The AG's suit alleges that Mortgage Assistance obtain the list of consumers from reviewing the Court Documents, and that Mortgage Assistance simply pocketed the upfront fee without providing any services.
The AG's press release ends with some tips about how to avoid these type of scams. In particular, I want to focus on, a common element of in advance fee scams, the AG's advice that up-front payments for foreclosure assistance is not legal in North Carolina. The trouble with this law is that whilte it makes enforcement easy, it is at the expense of protecting consumers. Very few distraught consumers facing foreclosure are going to quibble about paying in advance for services - indeed it would strike them as odd, given their obvious credit problems, that anyone would take their case on for only a promised payment. Like the FTC Franchising Rule, this law is designed to maked enforcement easy whether or not the consumer is protected. It also is unlikley that anyone wish to provide these services would enter the marketplace under these conditions.
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