In the following press release Florida Attorney General Bill McCollum today (10/16/08) announced that his office has filed a lawsuit against a South Florida company and its owners for allegedly engaging in a deceptive foreclosure rescue and mortgage default mitigation scheme. Outreach Housing, LLC, [Website] [FL Articles of Incorporation] and owners Blair L. Wright and Bryan E. Berry are named in the lawsuit which states the defendants victimized numerous Florida homeowners by misrepresenting the services which they had been paid to provide.

An investigation by the Attorney General’s Mortgage Fraud Task Force indicated the defendants allegedly represented to Florida homeowners that they should not make payments to their mortgage lenders as due, but should instead pay Outreach Housing approximately 60 percent of the monthly payments due to their lenders. In return for these monthly payments, the company and its owners allegedly claimed they would work with the lenders to reduce the consumers’ mortgage debts. According to consumers’ complaints, these services were not provided.

The Attorney General’s Office received more than 50 complaints from homeowners, but further investigation revealed that more than 600 homeowners had signed up for the company’s services. The lawsuit seeks consumer restitution and civil penalties of $10,000 per violation of Florida’s Deceptive and Unfair Trade Practices Act. The Attorney General has also asked the Court to prohibit the defendants from engaging in any business activity or operations offering, soliciting, providing or otherwise generally dealing in or related to the residential and commercial real estate business, including but not limited to mortgage financing, sales and/or brokerage.

The new Foreclosure Rescue Fraud Prevention Act of 2008, one of the Attorney General’s top legislative priorities during the 2008 legislative session, specifically targets schemes like Outreach Housing’s and offers homeowners additional protections against such practices. The law, which went into effect on October 1, requires that a foreclosure rescue consultant – a person who tries to arrange a new payment plan with lender or other alternative to foreclosure - provide a written agreement to the consumer and obtain the consumer’s signature before beginning any services. The legislation further requires the rescue consultant to include in the written agreement a specific notice of the homeowners’ right to cancel, including the procedure for cancelling, and a disclosure that the consumer should contact his or her lender first before signing because the lender may be willing to negotiate a payment plan free of charge.

Update on Thursday, February 5, 2009 at 4:24PM by The Editor - Ian Shuter - ACFE, DMS

On January 30, 2009 Alex Hager, Acting Commissioner of the Office of Financial Regulation announced that Broward County Circuit Judge Peter M. Weinstein has entered an Order placing Outreach Housing, L.L.C. into receivership, and enjoining Outreach and its principal, Blair Wright, from various specified activities.

Judge Weinstein’s Order was based on a complaint filed by the Office of Financial Regulation, which alleged that Outreach had induced numerous consumers in fear of foreclosure to pay to Outreach, rather than their mortgage companies, monthly payments typically approximating 60-65% of the mortgage payment due. In return, Outreach promised to obtain relief for the homeowner through its alleged network of attorneys. Outreach typically advised homeowners that the process through which they had obtained their mortgages was defective, entitling the homeowners to relief under federal law. In most cases the promised relief never materialized, leaving homeowners in a worse position than before. Outreach is not a law firm, nor does it have the license required by Florida law to “service” consumer mortgages.

Press Release