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Jan 29, 2009 5:12 pm US/Central
Minn. AG Sues More 'Foreclosure Consultants'
ST. PAUL (AP) ―
The Minnesota attorney general has filed lawsuits against two more foreclosure consulting companies that allegedly charged struggling homeowners big upfront fees then failed to deliver on promises to save their homes.
The lawsuits were filed Thursday against IMC Financial Services and American Financial Corp., which does business as National Foreclosure Counseling Services. Both have offices in Florida.
"These foreclosure consultants exchanged the hard-earned money of desperate homeowners for empty promises," said Attorney General Lori Swanson in a prepared statement.
She said the companies charged upfront fees of up to $1,850 and failed to deliver on promises to save Minnesotan's homes from foreclosure, usually by negotiating new terms with the lender.
She said it's illegal in Minnesota for foreclosure consultants to get paid before they perform their services.
Robert Dallavia, a director of National Foreclosure Counseling Services, of Jacksonville, Fla., denied the allegations.
"This is a situation where it's politics," he said. "Obviously, your attorney general up there wants attention, so she's going to slander a company and say all these derogatory things without even investigating."
He said his company has about 1,300 clients nationwide at any given time. They pay by putting money into an escrow account, he said, which National Foreclosure draws from as it performs services.
"I'm not saying there are no fraudulent companies in our industry," he said. "We're just not one of them."
The lawsuit against IMC was filed in Hennepin County District Court, while the National Foreclosure lawsuit was filed in Ramsey County District Court. With the latest two lawsuits, Swanson has now sued 12 foreclosure consulting companies.
Swanson said National Foreclosure has also been sued by the attorneys general of Colorado and Illinois.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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