Foreclosure Assistance Solutions Inc. repays 351 Texas homeowners more than $390,000


SAN ANTONIO, TX – March 12, 2009 – (RealEstateRama) — Texas Attorney General Greg Abbott today announced the conclusion of the state’s enforcement action against Foreclosure Assistance Solutions (FAS). As a result of an agreement, the Florida-based company must no longer engage in the foreclosure mitigation business in Texas and has paid more than $390,000 in restitution to 351 Texas homeowners. FAS is the eighth foreclosure rescue operation shut down by Attorney General Abbott.

“In the midst of economic hardship nationwide, the defendants launched an unlawful scheme to defraud struggling homeowners and reap illegal profits from the housing crisis,” Attorney General Abbott said. “Today’s agreement not only shuts this company’s doors, but it permanently prohibits its owners and operators from conducting this type of business in the state of Texas. Equally important, the agreement provides significant restitution for the victims of this unlawful enterprise.”

In April 2008, a Bexar County district judge required the company and its principal operators, Herb Zerden and Adolfo Quintero, to pay restitution to customers harmed by FAS. Additional defendants J.W.W. Services Inc. of California and owner John Woodruff also were included in the judgment. In 2008, the court authorized an additional 270 days for customers harmed by FAS’ practices to seek restitution. The court also approved up to $475,000 to be paid in restitution.

Customer restitution was distributed in the following manner:
• $390,691 was paid in restitution to 351 customers;
• $7,000 was placed in the state’s unclaimed property fund to be reclaimed by nine FAS customers who could not be located;
• $4,337 was paid to the disbursing agent; and
• $72,971 was deposited into the state’s General Revenue Fund.

In 2007, the Office of the Attorney General shut down Foreclosure Assistance Solutions’ Texas operations after charging the defendants with operating a fraudulent “foreclosure rescue” firm. According to the state’s enforcement action, the defendants’ unlawful foreclosure rescue scams targeted struggling Texas homeowners who fell behind on their mortgage payments.

The company claimed to have established relationships with mortgage companies and banks nationwide. Customers were told that those relationships would allow FAS to stop the foreclosure process. Homeowners who contacted Foreclosure Assistance Solutions were pressured to immediately pay a $1,200 fee and enter into a contract. The contract prohibited homeowners from contacting their mortgage lenders – yet communicating with lenders is critical when homeowners are facing financial difficulties. After paying the $1,200 fee, homeowners were largely ignored, and many of their homes were foreclosured.

Today’s settlement also prohibits the company from conducting Texas-based mortgage foreclosure mitigation in the future and requires that the defendants pay a total of $750,000, including $475,000 in restitution, $100,000 in civil penalties and $175,000 in attorneys’ fees.

Homeowners who have problems that could result in mortgage default or foreclosure should contact a counseling agency approved by the U.S. Department of Housing and Urban Development at (800) 569-4287. Additional information is available on HUD’s Web site,

In December, Attorney General Abbott and state Sen. Craig Estes (Wichita Falls) announced a legislative initiative that will help protect Texas homeowners from foreclosure rescue scams. If enacted, the proposal would enhance the Attorney General’s enforcement authority, provide new protections for homeowners and place new restrictions on foreclosure prevention consultants.

The Foreclosure Rescue Fraud Prevention Act would require foreclosure prevention consultants to be very clear about their services and clients’ rights in a written, plain-language contract. It would also require that these consultants obtain their customers’ written consent, in the form of a signature, before beginning any services or accepting any fees. An additional requirement mandates a written disclosure statement instructing homeowners to contact an attorney or a housing counselor before signing mortgage rescue agreements.

Consumers who believe they have been contacted or victimized by a fraudulent foreclosure rescue service can file a complaint with the OAG at (800) 252-8011 or online at


Attorney General Greg Abbott was reelected as the 50th Attorney General of Texas on November 7, 2006. Prior to his election as attorney general, Greg Abbott served as a Justice on the Texas Supreme Court and as a State District Judge in Harris County.


Office of the Attorney General
300 W. 15th Street
Austin, TX 78701
Phone: (512) 463-2100
Toll free: (800) 252-8011

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