The state Department of Financial Institutions on Wednesday filed actions against two companies for operating unlawful mortgage rescue or loan modification schemes that it says scammed consumers into paying large upfront fees but did nothing to help them stay in their homes and avoid foreclosure.
The actions by the department's Consumer Division are part of a joint federal-state action by the Consumer Financial Protection Bureau, the Federal Trade Commission and 15 states that target fraudulent rescue operations. The scams typically target struggling homeowners by offering, with payment of an upfront fee, a promise of negotiating lower mortgage payments with the homeowners' lenders, DFI said.
The actions filed Wednesday by the Department of Financial Institutions are against Serrano Financial LLC, doing business as Default Services and Default Servicing, and Michael A. Rabel & Associates LLC for conducting loan-modification business in Washington without a license and for accepting an upfront fee in violation of state and federal laws. The issue will be heard by an administrative law judge.