Virginia sues firm over loanmodification practices

    By Matthew Bowers
    The Virginian-Pilot
    © November 11, 2010
    CHESAPEAKE

    The state is asking a court to stop another company from promising worried homeowners it can halt their mortgage foreclosures. It’s also seeking to force the company to pay back $950 fees to its customers.

    Attorney General Ken Cuccinelli alleges the American Neighborhood Housing Foundation – which has offices in Chesapeake and Richmond – violates Virginia’s consumer-protection laws. His office filed a lawsuit last week in Circuit Court.

    More specifically, Cuccinelli claimed in the suit that the foundation improperly collected advance fees before performing the services paid for and made “false promises… when it represented or guaranteed it would stop a customer’s scheduled foreclosure,” when many times it only delayed them, if that.

    The attorney general in July sued two Virginia Beach companies – Nationwide Loan Modification Bureau and Real Estate Resolutions – alleging that they, too, improperly charged advance fees of up to $1,200 to help homeowners stave off foreclosures. Those cases remain active.

    Brian Gottstein, a spokesman for the attorney general, said in an e-mail that there were complaints against American Neighborhood Housing Foundation. This lawsuit, like the two Beach suits, is part of a state investigation into the “mortgage modification” industry in Virginia.

    The American Neighborhood Housing Foundation’s website and a mass-mail postcard included with the suit said it “will stop” foreclosures or pending auctions of homes.

    The suit said the foundation culled the addresses of potential customers from court records. It charged $950 up front or two installments totaling $1,050, according to the suit.

    The foundation’s website bills it as a “non-profit homeowner advocacy group” that mediates with lenders to stop foreclosures and home auctions and to craft new payment agreements.

    R. McIlwaine Keever Jr., identified on the website as its executive director, didn’t respond to a request for comment.

    Gottstein said the state was trying to settle with the foundation, but he couldn’t comment on its progress.

    The lawsuit seeks up to $2,500 in penalties and up to $1,000 in litigation costs per violation, with the number of violations to be determined at trial.

    A current online Better Business Bureau “reliability report” awards American Neighborhood Housing Foundation an “A” rating on a scale of A+ to F.

    The report said the Better Business Bureau received seven complaints in the past three years, and that in six instances the foundation addressed the issues raised or made reasonable efforts to do so even if the consumer wasn’t satisfied.

    The report didn’t describe the nature of the complaints.

    Matthew Bowers, (757) 222-5221, matthew.bowers@pilotonline.com

    Published on 11/11/2010 10:54:08