Cuccinelli to sue two firms for loan-modification practices

VIRGINIA BEACH

Virginia Attorney General Ken Cuccinelli is filing lawsuits against two companies based in Virginia Beach that offered foreclosure prevention services, alleging the companies violated consumer protection laws.

The suits, which will be filed in Virginia Beach Circuit Court, say the two companies illegally demanded money up front for their services and in some cases never performed. The suits ask the court to order the companies to return money to consumers and seek civil penalties.

Nationwide Loan Modification Bureau LLC and Real Estate Resolutions LLC both opened near the beginning of 2009 as the foreclosure problem in Hampton Roads began to mount. The companies touted insider information, attorney connections and an ability to persuade lenders to lower mortgage payments through loan modifications. The Virginian-Pilot raised questions about both companies' practices in an April 2009 article.

Federal regulators have called some loan-modification companies "bottom feeders" that take advantage of financially vulnerable homeowners. They say people at risk of losing their homes should seek help for free from government-approved nonprofit counselors.

The lawsuits allege the Virginia Beach companies would charge as much as $1,200 up front, which violates the Virginia Consumer Protection Act. The act prohibits loan-modification companies from charging money before performing the services.

The suit against Nationwide Loan Modification also accuses that company of doing little or nothing to help customers prevent or avoid foreclosure.

"During these difficult times, the last thing people need is to be kicked when they are down," Cuccinelli said in a statement. "The advance fees collected should be refunded where services have not been completely performed. I am pleased that my office has been able to address the alleged wrongdoing and I hope these cases will send a strong message that we intend to enforce our foreclosure rescue law."

Danielle McDole, a mortgage broker who founded Real Estate Resolutions, said Tuesday she was not aware of the lawsuit and declined to comment.

Before she opened Real Estate Resolutions, McDole owned Everyday Lending Mortgage Corp., a defunct subprime mortgage business that was sued for mortgage fraud. In an interview with The Virginian-Pilot last year, McDole said that suit came about because of the actions of a single employee and that as CEO of Everyday Lending she was unaware of the employee's actions.

The mortgage broker has lost three homes herself through foreclosure, according to a 2008 bankruptcy filing. In addition, she offered to give up three other properties as she liquidated her assets in the Chapter 7 bankruptcy.

Jason T. Gillentine, the owner of Nationwide Loan Modification, said he shut down his business several months ago after the attorney general's office began its investigation. He said he's been working with the office to comply voluntarily with the complaint.

"They really wanted to get my attention," he said.

Pilot writers Cindy Clayton and Jen McCaffery contributed to this report.

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com