Posted at: 07/29/2014 9:26 PM
By: Ryan Luby, KOB Eyewitness News 4
20 families claim a Chicago-based mortgage rescue group offered to help them lower their mortgage bills to avoid foreclosure, took their money, but rarely completed the work.
Investigators in New Mexico's Attorney General's Office filed a lawsuit against Credence Law Group, which has an address listed in Chicago, last week.
"They hadn't been in contact with my bank, they hadn't done anything they said they were going to do," Steven Lovato of Santa Fe said.
His family is among those named in the lawsuit. They paid the group $3,000.
Late last year, he said he received a flyer in the mail. It claimed Credence Law Group could lower mortgage rates to as low as two-percent.
"My wife, she had quit her job to take care of our son, and we were looking to refinance, or see what options we had to lower our mortgage," Lovato said.
The couple's son is currently 10 months old.
Lovato said the company was supposed to collect his monthly mortgage payment in the process of negotiating a new rate with his lender.
"So basically my mortgage was going to them and I was falling behind on my mortgage," he said.
He suspected the group was not delivering on its promise when his lender called him to ask why he stopped paying his mortgage bill.
"They'd never heard of them," Lovato said of the lender.
Credence Law Group was not legally licensed to offer mortgage relief services in New Mexico, according to the Attorney General's staff.
David Kramer, the lead attorney on the case, said the group violated New Mexico state law irrespective of any success stories it may have achieved in the last few years.
"That still doesn't matter. [Customers] were brought to the enterprise by an unlawful advertisement, it was deceptive, and it was an unlawful transaction," he said.
Kramer said these types of companies often prey on families who are struggling.
"Those people are often just trying to make ends meet and save the house," he said.
The Ohio Attorney General also filed a lawsuit against Credence Law Group after five Ohioans filed complaints. The state suspects more will come forward.
Altogether, Kramer said Credence Law Group likely collected roughly $4 million, nationwide, in 2013. The lawsuit claims one of the group's employees would collect between $30,000 to $50,000 per month.
KOB attempted to contact the group over the phone, but the call immediately went to a cycle of 'on hold' music. No one ever picked up the phone.
The group's website shows it is no longer accepting new clients.
Fortunately, the group refunded half of the families named in the New Mexico lawsuit, including the Lovato family. It's unclear if the remaining families will receive a check as well.