On September 18, the New York Attorney General announced that it had reached a settlement with a title company, mortgage broker, disbarred attorney and others, stemming from allegations that they had operated a mortgage foreclosure rescue scam. The announcement alleged that the foreclosure relief providers told homeowners that they could refinance their mortgages and repair their credit by turning over title to their property in a “sale-leaseback” agreement. The announcement alleged that despite these promises, the foreclosure relief providers failed to apply homeowners’ payments to their mortgages, resulting in homeowners facing foreclosure and eviction. The settlement requires the foreclosure relief providers to pay $417,500 in compensation to 14 homeowners, and temporarily bans the providers from industry participation.
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