The lawsuit alleges that American Team Mortgage charged more than $80,000 in fees from nearly three dozen Oregon homeowners in violation of Oregon law
Attorney General John Kroger today announced a lawsuit that accuses the California-based American Team Mortgage, Inc., of repeatedly violating Oregon's Unfair Trade Practices Act and Mortgage Rescue Fraud Protection Act.
"Homeowners facing foreclosure need help, not false promises," said Keith Dubanevich, Chief of Staff and Special Counsel to Attorney General Kroger.
The lawsuit filed today in Marion County Circuit Court alleges that since January 2009, American Team Mortgage charged 32 homeowners a total of more than $80,000 in fees for mortgage loan modifications. Most of those fees were charged in advance of providing services in violation of Oregon law, the suit alleges.
The company obtained loan modifications for only a fraction of their Oregon clients, and possibly as few as two, the suit claims.
Despite American Team Mortgage's poor record of obtaining loan modifications and despite promises to refund clients it could not help, the company refunded only two of the 32 Oregon homeowners who paid advance fees for loan modifications.
By June 2010, the lawsuit alleges, American Team Mortgage effectively went out of business. Its phone number was disconnected. Mail was returned. Dozens of Oregon homeowners were left without a loan modification or a refund. At least one client lost his home to foreclosure. Others are facing foreclosure.
To protect Oregon homeowners from predatory mortgage relief scams and unscrupulous loan modification practices, the Oregon Legislature passed laws in 2008 and 2009 regulating companies involved in foreclosure counseling and loan modification services. House Bill 3630 and 2191 prohibit the charging of advance fees and require loan modification and foreclosure counseling companies to register with the Department of Consumer and Business Services (DCBS).
The lawsuit alleges that American Team Mortgage failed to register with DCBS.
"Companies offering loan modifications must be registered, and they must meet Oregon's strict laws designed to protect consumers," said David Tatman, administrator of the DCBS Division of Finance and Corporate Securities. "For homeowners seeking help with loan modifications, check the company's credentials, ask a lot of questions, and consider calling a nonprofit HUD counselor for free assistance."
Oregonians can check with the Division of Finance and Corporate Securities to see if a company is registered, at 1-866-814-9710. To reach a nonprofit HUD foreclosure counselor, call 1-800-SAFENET.
The lawsuit also alleges that Steve Hufstedler, the company's owner and President, claimed in a video on American Team Mortgage's website that the company got "great results more than 95 percent of the time."
The lawsuit seeks to permanently ban American Team Mortgage and Hufstedler from performing loan modifications and foreclosure counseling in Oregon. The lawsuit also seeks full restitution for Oregon consumers.
Assistant Attorney General Harry Wilson is handling the case for the Oregon Department of Justice.
Attorney General John Kroger leads the Oregon Department of Justice. The Department's mission is to fight crime and fraud, protect the environment, improve child welfare, promote a positive business climate, and defend the rights of all Oregonians.
Kate Medema, 503-378-6002, firstname.lastname@example.org