A local firm offering loan modification services to homeowners facing foreclosure violated a state law that prohibits companies from charging an up-front fee for their services, according a lawsuit filed Feb. 13 by Florida Attorney General Bill McCollum.
McCollum named Orlando-based FMA Servicing Inc. and its owners in the suit filed in Orange County Circuit Court.
McCollum’s economic crimes division investigation revealed that FMA Servicing, which does business under the name Financial Management Advisors, charges an up-front fee as high as $2,500 to homeowners seeking loan modification services, the complaint said. The complaint also said the firm claimed affiliations with lenders such as Fannie Mae, Freddie Mac and Lending Tree, but couldn’t provide any document to support that affiliation.
FMA also claimed to have attorneys and certified public accountants on staff, but later told the Attorney General’s office it has no employees beyond those named in the complaint, the suit said.
The complaint names the firm’s three directors as defendants: Salvatore Esposito, FMA president; Joseph Esposito, secretary; and Edward Billings, treasurer.
Calls to FMA were referred to Orlando Attorney Louis Gonzalez, who could not be reached for comment.
The suit asks the court to grant a permanent injunction prohibiting FMA Servicing from charging up-front fees and order the company to pay restitution on behalf of affected consumers, civil penalties of $10,000 for each violation, and reimbursement for costs related to the investigation and litigation.
“Companies and individuals who target homeowners in potentially desperate situations should not be operating in our state,” McCollum said in a prepared statement. “Florida will not tolerate businesses that prey upon those on the verge of foreclosure.”
This is the first lawsuit filed under the new Foreclosure Rescue Fraud Prevention Act, the release said. The law, which took effect on Oct. 1, protects homeowners in foreclosure or nearing foreclosure from companies offering potentially fraudulent foreclosure “rescue” services.
The Attorney General’s Office is reviewing the practices of companies statewide providing foreclosure-related rescue services to ensure the companies are in compliance with the new law.
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