Cooper Goes to Court to Halt Foreclosure-Aid 'Scheme'

Cooper filed suit this week against Mortgage Assistance Solutions, LLC, which also does business as Fresh Start. Fresh Start has an office in Clearwater, Fla., although its manager, Michael Thomas Stoller, resides in Beverly Hills, Calif.

Wake County Superior Court Judge Robert Hobgood ordered the Fresh Start to stop temporarily its their foreclosure assistance and to turn over records on all North Carolina customers within 10 days. Cooper asked the court to ensure that any money North Carolinians paid to Fresh Start goes to either them or their mortgages.

"When you are facing foreclosure, there are people out there who are vultures who will prey on you, prey on anybody who is in a desperate situation," said Josh Stein, a senior deputy attorney general who heads the state's Consumer Protection division.

"These folks (Fresh Start) made representations that were not true, because they knew the homeowners were hoping beyond that they could stay in their homes, when they didn't really have anything to offer," Stein added.

As alleged in Cooper’s complaint, Fresh Start sent mail, promising "creative ways" to help North Carolina homeowners who were facing foreclosure. Postcards said the company would “to immediately pay all the money your mortgage company is currently demanding.”

Homeowners who called were told that Fresh Start had saved many homes from foreclosure and would negotiate with their lenders and help them get a new loan.

Consumers who signed up for the service paid Fresh Start $1,200 to $1,400 and were told not to contact their mortgage lender on their own. “In reality, Fresh Start did little or nothing to help homeowners resolve foreclosure and get new loans,” Cooper said.

Under North Carolina law, it is illegal to charge an upfront fee for foreclosure assistance.

The suit against Fresh Start came amid projections that more than 60,000 North Carolinians will lose their homes to foreclosure this year – the highest rate ever in the state and an increase of 10 to 20 percent from 2007.

“Families facing foreclosure need real help, not expensive schemes that drive them further into debt,” Cooper said. “People should call North Carolina’s free hotline and avoid losing their hard-earned money to scams.”

Five North Carolina homeowners complained to Cooper’s Consumer Protection Division about Fresh Start.

One Wilmington man said he paid $1,200 for help and was told that someone had been “assigned to his case” and was promised that Fresh Start “would handle everything” to help him keep his home.

Finally, after getting no help from Fresh Start and with the foreclosure sale of his house fast approaching, the homeowner turned to a private attorney, who was able to stop the foreclosure.

Another homeowner paid Fresh Start $1,300 to have her loan reinstated and stop foreclosure on her house in Mocksville. She later learned that Fresh Start had never contacted her mortgage lender as promised. After getting no help from Fresh Start, she was able to work out a solution with the lender on her own.

A second court hearing on Fresh Start will be held in 10 days. Cooper has asked for the operating ban on Fresh Start to be made permanent.

“Foreclosures are on the rise and many families don’t know where to turn for help,” Cooper said. “Instead of paying an upfront fee for foreclosure assistance, call the HOPE hotline for free help.”