AZ warning issued about new mortgage ploy - WFXG FOX 54 - News Now

AZ warning issued about new mortgage ploy

Arizona Attorney General Tom Horne Arizona Attorney General Tom Horne
PHOENIX (CBS5) -

A new mortgage ploy is surfacing in Arizona, Attorney General Tom Horne said Wednesday.

Residents are being warned about a mailing that appears to be an official legal or government document. There is no company name or return address on the envelope or the letter itself, Horne said. A call to the toll-free number in the letter reveals the company as Fresh Start, based in New York.

The letter informs homeowners that they may be eligible to join a national lawsuit or make a potential legal claim against a mortgage lender. The pitch from Fresh Start is that the homeowner must first pay $2,700 for the company to do "research" and then another $2,500 to retain a lawyer. Such up-front fees are a violation of federal regulations and Arizona consumer fraud laws, Horne said.

"Fresh Start claims to offer so-called audit services as a precursor to directing consumers to obtain legal assistance for mortgage holders who may have been victimized in the mortgage crisis," Horne said. "But they first require as much as $5,200 up front from a homeowner. This is a blatant violation of Arizona law."

Horne said it's ironic that the consumer who brought this to the attention of his office has not been victimized in the mortgage crisis, but Fresh Start indicated he may be eligible for relief anyway and should pay the initial up-front fee for "research."

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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