CURRAN ORDERS COMPANY TO CEASE OFFERING
PHONY FORECLOSURE PREVENTION SERVICES
Company Ordered to Pay Restitution and $500,000 Penalty
Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division ordered a Baltimore company to cease offering illegal credit repair and foreclosure assistance services in violation of Marylandís Consumer Protection Act and Credit Services Businesses Act. The company and its officers were also ordered to pay restitution to all consumers harmed, as well as a $500,000 penalty.
The company, Creative Financial and Housing Services, Inc., and its officers, Beecher H.W. Brown and Danny Blue, had offices at 301 N. Charles Street, Suite 803, Baltimore, and at 4700 Auth Place, Suite 410, Camp Springs, Md. It promised people whose homes were being subjected to foreclosure that it could delay or prevent the foreclosure proceedings, in return for a fee, usually $750. However, the Division found that Creative Financial was unable to delay foreclosures through legitimate means and merely filed frivolous court pleadings on behalf of the consumers, whose homes were eventually lost to foreclosure.
The company also enrolled the consumers in its "savings program," which it said was sponsored by the U.S. Department of Housing and Urban Development (HUD) to enable consumers with past credit problems to buy new homes. Creative Financial falsely advised consumers that because their homes had been foreclosed upon, they were no longer obligated to make their mortgage payments. It instructed the consumers to make payments to Creative Financial, which promised to hold the money in escrow and later help them buy a home with the money. However, Creative Financial had no relationship with HUD that would enable it to offer enrollment in any HUD program. Instead, Creative Financial and its officers used the money for their own purposes.
Additionally, Creative Financial offered to improve consumersí credit ratings in exchange for an advance fee that was usually hundreds of dollars. However, neither Creative Financial nor its officers are licensed or bonded with the Department of Labor, Licensing and Regulation as required by the Maryland Credit Services Businesses Act, so they could not legally offer credit repair services to consumers. Creative Financial also failed to disclose to the consumers that negative information in a credit history that is accurate cannot be removed.
"Consumers should be wary of quick-fix offers to repair their financial problems because often the services offered are ineffective and may be illegal," Attorney General Curran said.