The Colorado attorney general’s office has filed a lawsuit against Loan Modification Solutions, alleging the Castle Rock company defrauded consumers looking for home loan modifications and foreclosure relief in Colorado and in other states.
The complaint filed in Denver District Court states that Loan Modification Solutions; its owners, Robert Auhll, 47, and Nanette Auhll, 48, and salesman, Thomas Stefanszky, 48, collected in $2,995 upfront fees from homeowners in exchange for loan modification services.
The company is suspected of taking in more than $1 million since January 2009. Under Colorado law, companies cannot seek an upfront fee for loan modification or foreclosure relief services.
Loan Modification Solutions also is suspected of using deceptive advertisements to attract customers, ignoring consumers’ requests for refunds and falsely advertising that it used “skilled” and “professional” negotiators to secure modifications.
The complaint states the company did little more than collect documents from homeowners and fax them to their lenders.
The defendants also are suspected of starting up a new business, Principal Financial Partners, Inc., in September 2010 that solicited upfront fees of $3,495 from homeowners interested in reducing their principal mortgage balance. These activities, too, violate Colorado’s consumer protection laws.
Attorney General John Suthers encouraged people who are facing or are in foreclosure to obtain help from the Colorado Foreclosure Hotline, 1-877-601- 4673, before hiring a private company to try to modify their home loans.
