St. Louis, Mo., Nov. 3, 2011 – A financial services company that allegedly took money from its customers and then failed to help them repair their credit has a new name and a new location, the Better Business Bureau (BBB) warns.
The BBB suggests caution when dealing with Eagle Audit Services of St. Peters, Mo. The new business is owned by Smart Solutions Financial Services, which formerly operated in South St. Louis County and is the focus of more than 30 consumer complaints.
Smart Solutions has an “F” grade with the BBB, the lowest grade possible. Steve Scharf has identified himself as owner and president of Smart Solutions. Michael Hathman has identified himself as Smart Solutions’ vice president and chief compliance auditor for Eagle Audit Services.
Eagle Audit Services describes itself as a “forensic home loan audit service” – a business the Federal Trade Commission has labeled “the latest foreclosure rescue scam to exploit financially strapped homeowners.”
Michelle Corey, BBB president and CEO, said it appears that Smart Solutions may have changed its business model, but not its willingness to take advantage of vulnerable consumers.
“Unfortunately, Eagle Audit Services seems to be following in the same predatory footsteps as Smart Solutions,” Corey said. “Many forensic loan audits have been shown to do little more than line the pockets of those who are marketing them.”
An FTC consumer alert said that foreclosure “rescue” professionals “use half-truths and outright lies to sell services that promise relief to homeowners in distress,” but usually do little to help them.
The alert said there is no evidence that forensic loan audits can help get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed auditor, a mortgage professional, or a lawyer.
On its website, Eagle Audit Services says it scrutinizes loan documents, looking for lending violations. If violations are found, the old loans could be replaced with loans with lower balances and/or lower interest rates, the business says.
The FTC says audit firms claim the audit reports can be used to avoid foreclosure, accelerate a loan modification, reduce the loan principal or cancel a loan completely. “Nothing could be further from the truth,” said the FTC.
The BBB issued a news warning on Smart Solutions on Aug. 29, calling the company’s practices “nothing short of reprehensible.”
Customers of Smart Solutions reported that they made advance payments – usually ranging from $800 to $1,500 each – in exchange for promises that the company would help them improve poor credit ratings or assist in finding them a lease-to-own home. But several of the customers said they felt the company abandoned them after taking their money. Smart Solutions also ran into trouble with two of its previous landlords in the St. Louis area. In one case, a judge ordered Scharf and Smart solutions to pay $13,000 in back rent; in the other case, Smart Solutions was sued for $1,800 in back rent and attorneys’ fees.
Two weeks after the BBB news warning, Smart Solutions registered Eagle Audit Services which recently began marketing loan audits.
In response to BBB questions, Hathman said Smart Solutions no longer is involved in credit repair or rent-to-own programs. Regarding its past problems, Hathman said they were because many clients failed to follow through on the advice they were given. He said Eagle Audit Services is working with a local law firm and guarantees “a fully completed forensic loan audit” for its clients. If no lending violations are found, he said that Eagle will issue a 100 percent refund. He added that Eagle audit “has a strict policy of not engaging in loan modifications.”
The BBB offers the following advice for consumers facing foreclosure or looking to modify their current home loans or obtain new loans:
- Beware of anyone who guarantees that he or she can stop a foreclosure.
- Avoid dealing with anyone who instructs you not to contact your lender, a lawyer or a credit or housing counselor.
- Do not pay advance fees for mortgage assistance or audits.
- Sign agreements only after reading and understanding them thoroughly.
- Communicate with your lender; you may be able to negotiate a new payment schedule on your own.
- Contact the BBB for Business Reviews at www.bbb.org or 314-645-3300.
Contacts: Michelle Corey, President & CEO, 314-584-6800, email@example.com; or Chris Thetford, Vice President-Communications, 314-584-6743 or 314-681-4719 (cell), firstname.lastname@example.org; or Bill Smith, Investigator, 314-584-6727, email@example.com