Blumenthal says Florida mortgage rescue firm scammed homeowners

Connecticut's attorney general is suing a Florida mortgage rescue firm for allegedly defrauding at least seven consumers and failing to help them save their homes from foreclosure.

Attorney General Richard Blumenthal said Monday that FHA All Day.com Inc. of Delray Beach, Fla., charged $2,500 to $4,500 to negotiate with lenders to help consumers avoid foreclosure and reduce indebtedness, but then failed to deliver the services as promised. The complaints from consumers date back to January, he said.

The company's very name misleadingly suggests a relationship with the U.S. Federal Housing Authority that does not exist, Blumenthal noted.

Jerry Farrell Jr., commissioner of the state Department of Consumer Protection, is participating in the lawsuit, which is attracting more consumers since the word went out early Monday about the allegations, Blumenthal said.

"Within the past few hours we've received several more calls (from possible victims) as people become aware of our action," Blumenthal said Monday afternoon.

The lawsuit seeks restitution for consumers who Blumenthal alleges have lost tens of thousands of dollars, as well as civil penalties of up to $5,000 per violation of state consumer protection laws.

FHA All Day.com promised one homeowner a refund of its upfront fee if it failed to obtain a mortgage modification. The firm falsely informed another it was authorized by the federal government to provide mortgage rescue services, Blumenthal said.

"Legally, they are clearly accountable for wrongdoing in taking advance fees which are barred by law," Blumenthal said.

"More broadly, they have made misleading and deceptive statements about their connection to the federal government and their ability to help people while taking their money," he continued. "Even more broadly, the promise they would save homes and solve mortgage problems simply was untrue."

The company failed to win loan modifications, reduce indebtedness, give promised refunds or provide other mortgage rescue services to consumers, Blumenthal's lawsuit charges.

Company representatives could not be reached to comment.

p.daddona@theday.com