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A Houston company has been slapped with a $3.5 million judgment for defrauding hundreds of Hispanic homeowners in Texas out of tens of thousands of dollars before the company's owners fled the country, Texas Attorney General Greg Abbott announced Tuesday. District Judge Adolph Canales also issued a permanent injunction against City Mortgage Services Inc. and its owners, Gustavo Duarte and Alfredo Mendez, preventing the company from defrauding consumers through its debt-reduction service. Ruling in a case filed by Abbott, the judge found City Mortgage violated the Texas Deceptive Trade Practices Act and the Texas Home Solicitation Act, and ordered the defendants to pay $3.3 million in civil penalties and $210,000 in restitution for the affected consumers. According to the court, City Mortgage, which had offices in Austin, Dallas, Fort Worth and Houston, dispatched teams of door-to-door salespeople throughout Hispanic neighborhoods to tout the company's debt-reduction service. Allegedly, City Mortgage promised consumers it would save them thousands of dollars by withdrawing money from their accounts and then forwarding amounts to their mortgage holders that were larger than their regular mortgage payments, thus reducing the time it took to pay off the loans. The company, which the court says charged families $700 and $1,000 each to sign up for the service, failed to forward hundreds of payments and instead pocketed the money, according to Abbott. City Mortgage shut down abruptly in 2004, leaving consumers owing their mortgage companies substantial amounts of money in missed payments and late fees, according to Abbott. The owners fled the country and are being sought. The judge's order also found City Mortgage failed to inform consumers that its service was something the homeowners could do themselves by dealing directly with their mortgage companies. [more]