Loan modification: Oregon sues lender over fees

Loan modification company in California charged Oregon homeowners more than $80,000 in illegal fees, attorney general says.

Don Ryan/AP/File
A house, still under construction, is marked as sold in the west hills of Portland, Ore., in 2005, when the housing bubble was pushing prices up. Now that the bubble has burst, lenders have been using loan modification for homeowners squeezed by falling housing values and the Great Recession. Oregon's attorney general has sued one California company, saying it charged illegal fees for the modifications.

The Oregon attorney general has sued American Team Mortgage, claiming the California loan modification company charged more than $80,000 in illegal fees to Oregon homeowners.

The lawsuit filed this week in Marion County Circuit Court alleges that American Team Mortgage charged 32 Oregon homeowners the fees before providing services.

The complaint alleges the company obtained loan modifications for only a fraction of them and refunded fees to only two homeowners who paid them in advance.

By June 2010, the lawsuit said American Team Mortgage effectively went out of business, leaving dozens of Oregon homeowners without a loan modification or refund.

The lawsuit also alleges that Steve Hufstedler, the company's owner and president, clai

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