Charlotte Companies Sued For Foreclosure Fraud

Sep 26, 2012

The North Carolina Attorney General’s office filed a lawsuit against three mortgage loan modification companies on Friday. Two of the three companies are based in Charlotte.

According to the lawsuit, one of the companies, Community Mortgage Assistance Program, charged customers up to $1,500 in advance. 

Koy Chiu is executive director of the company. On her website, Chiu advertises: “TIRED OF MODIFICATION SCAMS?! KNOWLEDGE IS POWER! SAVE YOUR HOME TODAY!”.

So it came as a shock to find out that her company is being sued for being a scam.

She says the lawsuit is “ridiculous”, none of her clients were behind on their mortgage payments and that she was not notified of any pending lawsuit.

Attorney General Roy Cooper provided documents showing that they had sent cease and desist letters to Chiu and owners of Charlotte-based Lender Exchange and Tidewater Financial in Wilmington.  The companies are being sued for “ripping off homeowners” by charging customers illegal fees and not offering meaningful help. 

Under a state law passed in 2005, it is illegal to charge an upfront fee for foreclosure assistance or loan modification services.

All of the companies deny the accusations.

“We saw so many abuses from companies that took money upfront so we warn consumers that when someone wants money upfront, turn the other way,” Cooper says.

Cooper says homeowners should look into free counseling resources like the North Carolina Foreclosure Prevention Fund that don't charge any fees. His office has received more than 1,000 complaints from customers about foreclosure scams and that they've already won 13 lawsuits.