Beware Shady Mortgage 'Helpers' Claiming Affiliation With Your Bank

novationState officials are warning homeowners to take a second look before leaping into "mortgage-assistance" deals offered by what appear to be companies tied to their own banks.

The latest warning comes from Connecticut, where state Attorney General George Jepsen called out two California companies -- Novation Marketing Center and Novation Law Center -- for attempting to draw customers of Webster Bank into debt negotiations for which neither business is licensed in the state.

In the companies' distributed literature, according to Jepsen's office, were misleading suggestions about the businesses' affiliation with Waterbury, Conn.-based Webster Bank."They implied they were affiliated with Webster when that was not the case," said Susan Kinsman, spokeswoman for the AG. "They also violated Connecticut law by soliciting Connecticut consumers for debt negotiation services when they did not hold a Connecticut license to do so."

Jepsen ordered the pair of companies to stop contacting consumers in Connecticut. He wants copies of everything they've sent out, and a list of any in-state customers with whom the Novation companies have actually done loan-modification business.

"Connecticut law provides specific protections, such as detailed disclosure and no fees up front, for consumers who need help modifying loans or other debt negotiation," Jepsen said in a statement. "The law also prohibits unlicensed companies from doing business in Connecticut."

The crackdown on Novation comes in tandem with recent activity by the state's Department of Banking, which, in the wake of the mortgage crisis, is pursuing unlicensed loan negotiators in Connecticut. Consumers can verify that a business contacting them is licensed in the state by visiting the department's website.

Officials at Webster Bank want customers contacted by any firms that suggest an affiliation with their financial services to contact bank representatives directly at (203) 741-4877.

Homeowners in need if assistance, when it comes to matters of mortgages (and foreclosures), can find resources at the Attorney General's website. Washington state has issued a similar warning and has posted similar resources at its site.
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