Woman, company must pay $1M after mortgage rescue fraud conviction
A Big Island woman and her company have been ordered to pay more than $1 million in fines and restitution in a final judgment issued last week in a mortgage rescue fraud case that affected some Maui residents.
The state Department of Commerce and Consumer Affairs’ Office of Consumer Protection obtained the judgment against Francha Services LLC and owner Edna A. Franco.
According to a DCCA news release, Franco began meeting with homeowners on Maui, Oahu and the Big Island in 2010, telling them she could save their properties from foreclosure or help them obtain their homes free and clear with forensic loan audits. She offered to help victims file lawsuits against their lenders and collected thousands of dollars from each victim upfront “for services that were either poorly rendered or never rendered at all,” the news release said.
None of the properties was saved from foreclosure, the DCCA said.
In 2012, the state obtained a preliminary injunction ordering Franco and the business to cease operations and communications with clients. More than a year later, 2nd Circuit Judge Rhonda Loo found Franco in contempt of court for continuing the services despite the court order.
In the final judgment issued Thursday, Loo ordered Franco and her company to pay $168,648 in restitution and prejudgment interest to 17 victims who filed complaints with the Office of Consumer Protection. Another $874,157 in civil fines and penalties were levied against Franco and her company, adding up to more than $1 million.
As part of a permanent injunction, Franco and her company also were prohibited from owning or operating any business in the state until the judgment is paid. They also are not allowed to act as “distressed property consultants” and can not perform services relating to properties in foreclosure or at risk of foreclosure.
Franco and her company cannot charge or collect fees until they complete any services they have contracted or promised to perform.
“Judge Loo’s ruling sends a clear and unambiguous message that this type of illegal conduct targeting Hawaii’s homeowners will not be tolerated,” Office of Consumer Protection Executive Director Bruce Kim said in the news release.
He said Act 26, which was signed into law by Gov. Neil Abercrombie on April 25, expands protections for distressed homeowners.
Franco could not be reached for comment. A telephone number for her company was disconnected. Court records indicate that she was representing herself in the court case.
According to the DCCA, mortgage rescue scam artists may target homeowners who are in default on their mortgage or who are facing foreclosure. “These mortgage rescue ‘professionals’ use half-truths and outright lies to sell services that promise relief to homeowners in distress,” the DCCA news release said.
The DCCA recommends that homeowners experiencing difficulty with their mortgages or in dealing with lenders contact a federal Housing and Urban Development-certified counselor.
Additional information is available online at cca.hawaii. gov/hfic/ or by calling the Hawaii Foreclosure Information Center at (808) 587-3222.
* Lila Fujimoto can be reached at email@example.com.