News Release: State Obtains Permanent Injunction, $1M in Mortgage Rescue Fraud Case

Posted on May 13, 2014 in OCP



Office of Consumer Protection










May 13, 2014


State Obtains Permanent Injunction, $1M in Mortgage Rescue Fraud Case

Court Orders $168,000 in Restitution for Homeowners


HONOLULU —The Department of Commerce and Consumer Affairs’ Office of Consumer Protection (OCP) obtained a final judgment against Francha Services, LLC and Big Island resident Edna A. Franco (Defendants) on May 8 that includes fines and restitution totaling more than $1 million.


In 2010, Defendants began meeting with victims regarding their residential real properties, many of whom were either in foreclosure or at risk of foreclosure. In the course of these meetings, Franco told the homeowners that she could save their properties from foreclosure or help them get their homes free and clear with forensic loan audits and offered to assist the victims with filing lawsuits against their lenders. Defendants collected thousands of dollars from each victim up front, for services that were either poorly rendered or never rendered at all. Defendants saved none of the homeowners’ properties from foreclosure.


Under the terms of the final judgment, Second Circuit Court Judge Rhonda Loo ordered Franco and her company to pay $168,648.05 in restitution and prejudgment interest to 17 victims who reported Defendants’ illegal activities to OCP. Judge Loo also ordered $874,157.20 in civil fines and penalties against Franco and her company, for a total judgment of $1,042,805.25.


The permanent injunction prohibits Franco and her company from owning or operating any business in the State of Hawaii until all amounts due under the judgment have been paid.  Defendants are prohibited from acting as “distressed property consultants,” meaning they cannot perform services relating to properties that are in foreclosure or at risk of being foreclosed. Franco and her company are precluded from charging or collecting any money or fees until after they have fully performed all services they may have contracted or promised to perform.


“Judge Loo’s ruling sends a clear and unambiguous message that this type of illegal conduct targeting Hawaii’s homeowners will not be tolerated,” OCP Executive Director Bruce B. Kim said. “On April 25, 2014, Gov. Abercrombie signed Act 26 into law expanding protections for distressed homeowners against these predatory schemes. This judgment and the changes adopted under Act 26 reaffirm that the state intends to pursue these illegal operations to the full extent of the law.”


Upon signing the bill, Gov. Abercrombie said: “We want those who prey upon the fears and vulnerability of homeowners to know we will not allow them to take advantage of Hawaii’s people,” adding that the legislation brings Hawaii’s laws into further alignment with federal regulations.


Mortgage rescue scam artists may target homeowners who are in default on their mortgage or who are facing foreclosure. These mortgage rescue “professionals” use half-truths and outright lies to sell services that promise relief to homeowners in distress.


Recommendations for Homeowners

If you are experiencing any difficulty with your mortgage or in dealing with your lender or mortgage servicer, there are HUD-certified housing counselors located at various non-profit agencies here in Hawaii that can provide assistance on buying a home, renting, defaults, foreclosures, and credit issues at no cost to you. Please do not delay before contacting a HUD-certified counselor. The earlier you contact a counselor, the more likely they can help you. For more information as well as a list of HUD approved housing counseling agencies in your area, visit or contact the Hawaii Foreclosure Information Center (“HFIC”) at 587-DCCA (3222).


When looking for foreclosure prevention help, avoid any business that:


  • Promises they can stop the foreclosure process, no matter your circumstances
  • Instructs you not to contact your lender, lawyer or HUD approved housing counselor or credit counseling agency
  • Recommends that you stop making your mortgage payments
  • Recommends that you make your mortgage payments directly to it, rather than your lender
  • Collects a fee before providing any services
  • Recommends that you hire an out-of-state lawyer who isn’t licensed to practice law in Hawaii
  • Pressures you to sign papers you haven’t had a chance to read thoroughly or that you don’t understand


Violations of Hawaii’s Mortgage Rescue Fraud Prevention Act and the laws prohibiting unfair and deceptive trade practices subject offending parties to civil fines and penalties ranging from $500 to $10,000 per violation. Additionally, any violation of § 480E-10 occurring after July 1, 2012, is a class C felony punishable by up to five years imprisonment and a mandatory $10,000 fine.


Anyone who believes they have been victimized by a mortgage rescue scam, whether by the above Defendants or any other business, and have not filed a complaint with the state’s Office of Consumer Protection may contact theConsumer Resource Center at (808) 587-4272 or visit the OCP website at for more information about filing a complaint.


The Office of Consumer Protection was represented in this case by OCP staff attorney Landon Murata.


The State of Hawaii’s DCCA Office of Consumer Protection educates and protects consumers from unlawful acts or practices by companies that may cause harm to consumers. For further questions about services, contact the Office of Consumer Protection at (808) 586-2636.


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Media Contact:

Brent Suyama

DCCA Communications Officer


[email protected]