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Bondi sues foreclosure rescue firms accused of defrauding customers

Two West Palm Beach-based foreclosure rescue firms, as well as the man who owns them, were sued by Attorney General Pam Bondi today on claims that they used misleading and deceptive practices to defraud clients.

MGD Management and CRS Marketing offered "strategic default" services to homeowners, saying they could arrange it so clients lived in their homes for three years without paying the mortgage, taxes, homeowners association fees or insurance, according to the complaint. Both firms, as well as owner Mark Dalen, were named in the lawsuit.

The companies promised to defend clients against foreclosure and told homeowners they money they paid would cover all legal fees other than bakcruptcy filings, but the firms failed to provide legal services, according to the complaint. The firms also told homeowners to ignore any communication from lenders or creditors unless they came via certified mail, the Attorney General's office said.

“These companies preyed on Florida’s distressed homeowners who were already experiencing financial hardships,” Bondi said via a news release. “The laws that protect Floridians from deceptive practices and homeowners during the course of a residential foreclosure must be abided by, and I am pleased that the Court granted our motion to stop these companies from defrauding Floridians.”

The Broward County Circuit Court has issued a temporary injunction prohibiting the companies and Dalen from marketing, advertising or providing foreclosure-related rescue services and also froze the firms' assets. To view a copy of the lawsuit, click here.