Foreclosure 'help' ended up bringing more debt

Homeowners tell of dealings with companies that promised to prevent foreclosure but did nothing to help -- and charged them anyway.

When Chantae Grandsberry of Brooklyn Center was looking for a company to help save her home, she thought she'd found the perfect partner: An Oklahoma firm that had biblical scriptures on its website and billed itself as a Christian-based foreclosure prevention specialist.

"That was important to me and my husband," said Grandsberry, who is six months pregnant. "We didn't think that a Christian-based company would do anything wrong."

But Grandsberry lost her family home last October after the company, American Foreclosure Specialists, failed to deliver -- even after collecting more than $1,200 in advance, which is a violation of Minnesota law, according to Minnesota Attorney General Lori Swanson.

Earlier this month, Swanson filed suits against American and three other out-of-state companies, alleging they violated state law by collecting fees before completing the services they contracted to perform. Also, Swanson said, the companies did not deliver the solutions they promised, which put the distressed homeowners in a bigger bind because they lost time and even more money while trying to save their homes.

"They made a bad situation even worse," the attorney general said.

Swanson, who filed the suits in Hennepin County District Court, is also seeking injunctions to stop the companies from operating in Minnesota, part of an ongoing effort by her office to stop foreclosure fraud.

The lawsuits were filed against American; National Foreclosure Relief, a Nevada corporation with a California business address; Lewis Loss Mitigation of Alabama, which also does business as Stop Foreclosure and Lewis and Associates Consulting; D.R. Financial Services of California, which also does business as D.R. Financial and Superior Home Loans; Mortgage Default Assistance of Florida, and Home Assure of Florida.

Assurances made:

Swanson alleges that the companies used websites, direct mailings and phone calls to solicit property owners, assuring them they could stop the foreclosures they were facing.

In each case, lawyers with the attorney general's office said, the companies asked for money up front ranging from about $1,000 to almost $2,400.

The firms then demanded more money to continue working with the customers, all of whom were in arrears on their mortgages. The sums they sought ranged from about $150,000 to $200,000.

"The minute it hits that your home is in foreclosure, they come after you," said Lonnie Sievert of Brooklyn Park, who lost her home last year. "We just got in over our heads."

Terry Lake of Brooklyn Park, who has filed for bankruptcy to save his home, paid almost $2,400 to one of the companies. The advice he was given for his money: file for bankruptcy.

"I already knew that," said Lake, a car salesman. "I was being sold a product it was never their intention to deliver."

"We want to help you":

American Foreclosure Specialists' website used religion as part of its sales pitch to reassure prospective clients, the attorney general's office said. The company's website said "We are Christian owned ... Christian run ... We want to help you in your time of need," according to the lawsuit filed by Swanson.

In June, Grandsberry gave the company money and believed it when she was assured that the company was negotiating with her mortgage holder.

In September, Grandsberry got a call from her bank saying the home was being foreclosed on. "The Grandsberrys contacted their lender," the attorney general's lawsuit said, "and were informed that AFS had not engaged in any negotiations on their behalf."

Less than a month later, on Oct. 15, 2007, the Grandsberrys' family home was sold at auction by the Hennepin County Sheriff's Department.

"It's something I think about all the time," said Angela McWilliams of Elk River, another homeowner whom the attorney general's office claims was swindled and who is barely hanging onto her home.

"I go to work at times and try not to cry," McWilliams said, her voice breaking. "They didn't really help me. They hurt me. If we get foreclosed, we've got no place to go."