Troubled homeowners warned about mortgage relief scams

The state is reminding Hawaii homeowners to be mindful of foreclosure prevention scams, after filing a lawsuit last month against a distressed-mortgage relief company on Hawaii island that received numerous complaints.

"If you are in default on your mortgage or facing foreclosure, you may be targeted by a mortgage rescue scam," the state Department of Commerce and Consumer Affairs said in an announcement Tuesday.

The DCCA said homeowners seeking relief from foreclosure should avoid any service that:

» Collects a fee in advance.

» Recommends that you stop making mortgage payments or instead send the payments to the rescue service provider.

» Instructs you not to contact your lender, lawyer or a credit or housing counselor approved by the federal Department of Housing and Urban Development.

» Promises it can stop the foreclosure process.

» Pressures you to sign papers, especially if you don’t understand them or haven’t read them thoroughly.

The DCCA suggests that anyone who believes they have been victimized by any mortgage rescue scam should call its Consumer Resource Center at 587-3222.

The DCCA’s Office of Consumer Protection recently sued Francha Services LLC, a Keaau-based company controlled by Edna A. Franco, alleging that the firm committed "numerous" violations of the state’s Mortgage Rescue Fraud Prevention Act, which helps protect people with homes in foreclosure or at risk of foreclosure.

Francha Services advertises that it helps to prevent foreclosures by using certified forensic loan auditors or analysts who can discover possible violations in loan documents that can be challenged in court.

Franco said she has successfully helped numerous people avoid foreclosure but that an agent she hired on Maui was the sole cause of her firm’s problems with customers. "I fired him," she said. "He used my business to ruin these people."

Franco said the DCCA’s suit, which was filed in Circuit Court on Maui, is misdirected at her and her company. "The banks are the ones doing the wrongdoing," she said.