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State moves against mortgage rescue firm

August 2, 2012
The Maui News

The state has obtained a preliminary injunction against Francha Services LLC and Edna A. Franco for violations of Hawaii's Mortgage Rescue Fraud Prevention Act and other consumer protection laws, the Department of Commerce and Consumer Affairs' Office of Consumer Protection announced Wednesday.

Franco and her business in Keaau, the Big Island, targeted distressed homeowners on Maui, Oahu and the Big Island, offering to help save their homes from foreclosure, consumer protection officials said.

"The homeowners had to pay Franco in advance before she would help them and then (she) did little if anything to complete any of the services she promised," the office said.

Attempts to contact officials of Francha Services in Keaau for comment were unsuccessful.

Last month, 2nd Circuit Judge Rhonda Loo issued an injunction barring Franco from soliciting business from or contacting Hawaii consumers who are owners of distressed properties or engaging in any consultant contracts with them.

The judge's order prohibits Franco and her business from directly or indirectly taking, asking for, claiming, demanding, charging, collecting or receiving any money from Hawaii consumers for any purpose until after she and her business have fully performed any services that they have contracted or promised to deliver or perform.

Violations of Hawaii's Mortgage Rescue Fraud Prevention Act and the laws prohibiting unfair and deceptive trade practices subject offending parties to fines ranging from $500 to $10,000 per violation. Violations of the act are a felony, with a mandatory $10,000 fine.

State officials have warned people who are in default on their mortgages or are facing foreclosure that they may be targeted by a mortgage rescue scam. So-called mortgage rescue "professionals" use half-truths and deceptive tactics to sell services that promise relief to homeowners in distress, state officials said.

Officials recommend avoiding any mortgage rescue business that:

* Promises to stop the foreclosure process, no matter a homeowner's circumstances.

* Instructs homeowners not to contact their lender, lawyer or Housing and Urban Development-approved credit or housing counselor.

* Collects a fee before providing services.

* Recommends that homeowners stop making their mortgage payments.

* Instructs owners to make mortgage payments directly to the rescue business, rather than a lender.

* Pressures homeowners to sign papers they haven't had a chance to read thoroughly or don't understand.

Anyone who suspects he or she has been victimized by a mortgage rescue scam should call the state Office of Consumer Protection at (808) 587-3222.

HUD-approved housing counseling agencies in Hawaii can provide advice on buying a home, renting, defaults, foreclosures and credit issues for free. If facing foreclosure, people are advised to locate a HUD-approved Hawaii housing counselor at www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm/. They also may call (888) 995-4673 for free, comprehensive foreclosure assistance from housing experts.

 
 
 

 

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