The owner of a local company accused by the state Office of Consumer Protection of engaging in illegal foreclosure "rescue" services is maintaining her innocence and plans to file a motion this week asking a judge to reconsider a preliminary injunction that ordered her to cease offering services.
"I don’t let the state, you know, intimidate me," Edna A. Franco, owner of Hawaii island-based Francha Services LLC, said Sunday at a news conference outside the Department of Commerce and Consumer Affairs on King Street. "I’m here to fight back."
A Maui circuit judge Tuesday found Franco in contempt of court for not following the injunction, issued in July 2012. Franco’s $1,000-a-day fine for violating the injunction is up to about $430,000.
The news conference Sunday with attorney Melodie Aduja featured a cadre of Franco’s supporters who identified themselves as happy customers seeking justice.
Franco admits to having continued contact with about 480 Hawaii consumers regarding home foreclosure actions since the injunction was issued.
According to the contempt of court finding, Franco offered to conduct a $3,500 "forensic audit" for a Kalihi resident that would save her home. She required payment first, which allegedly violates the state’s Mortgage Rescue Fraud Prevention Act of 2008.
Franco, however, said she broke no laws because the injunction mistakenly identifies her as a distressed-property consultant, while she works as a certified forensic loan auditor. The law against upfront fees pertains to mortgage modification services, she said.
"That’s the one that they’re talking about," she said. "I am not doing a modification. I am doing analysis."
Forensic loan auditors examine mortgage documents for forgery, fraud and misrepresentation by banks to give attorneys leverage in foreclosure cases.
Aduja said the department based its allegation against Franco on a single witness statement that has since been recanted. That witness, Merlina Tabuyo, who was at Sunday’s news conference in a show of support, would not give any details regarding how she first came in contact with the state.
The contempt order says the state received at least 18 complaints from Hawaii consumers regarding Franco’s business when it filed the request for the preliminary injunction in April 2012.
