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Attorney general announces settlement with Chesapeake-based mortgage loan modification company and its owner
RICHMOND, VA (August 8, 2012) - Attorney General Ken Cuccinelli announced today that a settlement has been reached with R.L. Brad Street, LLC, a mortgage loan modification company headquartered in Chesapeake, as well as with Rhonda L. Wyland, the company's sole member/manager, for allegedly charging illegal advance fees before performing foreclosure rescue services for their customers.
The attorney general previously filed suit against R.L. Brad Street on August 23, 2011. In his complaint, the attorney general alleged that R.L. Brad Street violated the Virginia Foreclosure Rescue law by charging up to $3,000 in advance fees from consumers in connection with services to avoid or prevent foreclosure. Virginia's Foreclosure Rescue law prohibits a supplier of foreclosure avoidance or prevention services from charging or receiving a fee prior to the full and complete performance of the services it has agreed to perform, if the transaction does not involve the sale or transfer of residential real property.
In his complaint, the attorney general also alleged that R.L. Brad Street violated the Virginia Consumer Protection Act (VCPA) in some instances by failing to follow through on its promises to assist consumers in obtaining modifications of their mortgage loans. The VCPA generally prohibits suppliers from engaging in deception, false statements, false promises, or misrepresentations in connection with consumer transactions.
In May 2012, the attorney general obtained court approval to add Wyland as an additional defendant in the case. Cuccinelli asserted that Wyland should be held liable for R.L. Brad Street's violations of the VCPA because, among other reasons, all consumer payments allegedly were deposited directly to her personal bank account and commingled with her own assets, and because of her own active participation in the alleged violations.
The settlement includes the following key terms:
- A permanent injunction prohibiting R.L. Brad Street and Wyland from violating the VCPA, including the Foreclosure Rescue law, by, among other things, collecting advance fees in connection with services to avoid or prevent foreclosure.
- R.L. Brad Street and Wyland agree to a permanent injunction against them, prohibiting them from engaging in any violations of the Consumer Financial Protection Bureau's Mortgage Assistance Relief Services (MARS) Rule.
- The commonwealth is granted judgment against R.L. Brad Street and Wyland in the amount of $32,900 for restitution to consumers.
- The commonwealth is granted judgments against R.L. Brad Street and Wyland totaling $25,000 in civil penalties for their alleged violations of the Foreclosure Rescue law and the VCPA.
- The commonwealth is granted judgment against R.L. Brad Street and Wyland in the amount of $5,000 for reimbursement of the commonwealth's attorneys' fees and costs.
"This settlement results in judgments for the claims raised in our lawsuit against the company, and its owner, for their alleged violations of the Virginia Consumer Protection Act, including the Foreclosure Rescue law," Cuccinelli said. "This resolution will send a strong message that we will continue to pursue those who prey on Virginia's most vulnerable citizens."
The Office of the Attorney General continues to work with the Virginia Bureau of Financial Institutions to identify and investigate companies thought to be violating the advance fee prohibition on foreclosure rescue companies.
The settlement with R.L. Brad Street and Wyland which is in the form of a consent judgment, was filed for approval with the Chesapeake Circuit Court.
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