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'Mortgage rescue' companies targeted

The state Attorney General's Office said people were scammed with large, up-front fees.
/ Source: PhillyBurbs.com

The state Attorney General's Office said people were scammed with large, up-front fees.

Pennsylvania is suing two national "mortgage rescue" companies with offices in Bensalem and Lower Moreland for allegedly scamming folks with home-loan troubles.

The companies boasted the ability to prevent foreclosure or drastically reduce mortgage rates but failed to do so in some cases after charging the customers up to several thousand dollars, court documents stated.

"Many consumers paid large, up-front fees that resulted in little, if any, relief from their mortgage problems - leaving them in even worse financial situations," Pennsylvania Attorney General Tom Corbett stated Monday in a press release.

One of the businesses being sued is the Florida-based Foreclosure Awareness Inc., which had offices on Street Road and on Bristol Pike in Bensalem. It used the now-defunct Web site www.foreclosureguidances.com. Also named in the suit is that company's "director of mitigation," Michael Squillace of the 3100 block of Mechanicsville Road in Philadelphia.

The other business being sued is the Westmont, N.J.-based Best Interest Rate Mortgage Co., which had an office on Welsh Road in Lower Moreland. Its Web site is www.birmco.com. Also named in the suit is the company's president, Michael J. Diplacido of Clearbrook Lane in Sewell, N.J.

The newspaper was unsuccessful in reaching for comment representatives from either company or Squillace or Diplacido.

The lawsuits were filed in Pennsylvania's Commonwealth Court in Harrisburg, which is the court in which the state files its civil suits. The state claims both companies violated unfair trade practices, the state's consumer protection law, credit services act, the mortgage act and the telemarketer registration act.

The state is seeking refunds to the victims and restitution for the cost of the investigation. The AG's office also wants the companies to pay various civil penalties, which could include $1,000 for each alleged victim and $3,000 for each alleged victim who is 60 or older under the consumer protection law.

The suits do not list how many people were allegedly victimized. No alleged victims are named.

The lawsuits cite many of each company's advertisements and solicitations, which the state claims are bogus, misleading or confusing.

Foreclosure Awareness Inc. allegedly sent a flier to folks in danger of defaulting on their mortgages. It allegedly stated that the company had pre-qualified the mortgage holder for as little as $25,000 and as much as $250,000 in loan modifications.

The suit against Foreclosure Awareness Inc. includes correspondence to a customer who was charged $4,000 for the company's services. In another document, the company said it charges $250 an hour.

The suit against Best Interest Rate Mortgage Co. cites an ad in which the company allegedly said that through its negotiations, it could knock as much as $1,000 off someone's monthly mortgage rate for every month until the loan is paid off, court records stated.