Loan Modification Company Scams

Grosse Pointe man accused of swindling Saline residents out of money for foreclosure help

Art Aisner, AnnArbor.com

He offered to help struggling homeowners save their Saline homes from foreclosure, but authorities say all Bryan Crevier delivered were empty promises and widespread fraud.

Crevier, 48, is charged with multiple counts of larceny for allegedly swindling nearly $10,000 from three Saline women within a few months in 2008.

The Grosse Pointe man was scheduled to appear in Washtenaw County Circuit Court Wednesday, but his pre-trial hearing was adjourned to June 9 at his attorney’s request. He remains free on a $10,000 personal bond.

Saline police began investigating Crevier in the spring of 2008 when three city residents reported he took money from each of them up front for loan refinancing services like closing costs, appraisals and fees. The women, ages 47, 58, and 60, were all friends dealing with financial hardship and were in danger of losing their homes.

Though he presented himself as a mortgage modification consultant and had each resident fill out official applications, Crevier never filed the women’s paperwork with lending institutions, police reports said. By the time they suspected him of fraud, Crevier had stopped returning their phone calls and e-mails. When officers visited his Troy home that fall, it was vacant and appeared abandoned, police said.

For roughly a year, Crevier essentially disappeared. His phone numbers were disconnected and e-mails and letters went unreturned, police reports said. Local officers left the case open and didn’t get a break until Roseville police arrested Crevier for similar crimes in late 2009. That arrest culminated a three-month long probe into his dealings with a family trying to refinance, police said.

“This was old-fashioned detective work, and it ultimately paid off,” said Detective Sgt. Keith Waller of the Roseville Police Department. Waller noted he had to sift through scores of financial documents, cell phone records, and e-mails to track Crevier to a Grosse Pointe home that records show belonged to his girlfriend’s mother.

Crevier is also charged with one count of larceny by false pretenses of more than $20,000 in Macomb County.

Shortly after his arrest, Crevier told Saline police he had to deal with a lender based in Illinois whom he never met due to tightening credit restrictions, reports said. He said he sent that man a portion of the women’s money to cover appraisals and underwriting fees, and kept some to cover immediate costs here while the mortgages were pending. He did not keep records of the alleged transactions, police said.

Read more here: http://www.annarbor.com/news/grosse-pointe-man-accused-of-swindling-saline-residents-out-of-money-for-foreclosure-help/

NH AG Busts Guy For Ripping Off The Handicapped W/ Bogus Mod Company

Attorney General Michael A. Delaney, Banking Commissioner Peter C. Hildreth, and Carroll County Sheriff Christopher Conley announced today the arrest of Eric W. Eliason, aka Ricky Masci, (DOB 12/28/79) for Theft by Deception, as defined by RSA 637:2, with an extended term of imprisonment; Failure to Obtain a Debt Adjustment License, Untrue Statement and Fraudulent Business Practice as defined by RSA 399-D; and Failure to Obtain a Mortgage Originators License and Untrue Statements as defined by RSA 397-A.

Eliason, 30, of Tamworth New Hampshire, is charged with crimes that occurred in connection with his business, Deaf and Hard of Hearing Mortgage Consultants. The first set of complaints allege that the defendant took up-front money to assist hard of hearing victims in completing a loan modification of their home mortgage. The complaints allege that numerous representations were made to the homeowners that the modification was in process, and then that the modification was denied. It is further alleged that the defendant had never contacted the mortgage company to perform a modification. It is also alleged that Eliason intended to take advantage of the victim’s physical condition that impaired the victim’s ability to manage their property or financial resources or to protect their rights or interests.

A second set of complaints allege that the defendant attempted to broker a re-finance of a home loan for another hard of hearing couple. It is alleged that he obtained up-front fees with the promise that in the event the re-finance was not completed, money would be refunded. No loan was obtained, and no money was refunded. Eliason was not licensed to conduct any of these transactions. 

Arraignment will likely be scheduled for February 10, 2010 in the Southern Carroll County District Court. The charges range from a Class A Felony with a extended term of imprisonment, which carries a maximum penalty of 10-30 years in state prison and a $4,000 fine, to misdemeanors, which carry a maximum penalty of 12 months in the House of Corrections and a $2,000 fine. 

These criminal charges are a result of a joint investigation conducted by the New Hampshire Attorney General’s Office, the New Hampshire Banking Department, Carroll County Sheriff’s Office and the DeKalb County, Illinois Sheriff’s Department. 

ATTORNEY GENERAL ANNOUNCES GUILTY PLEA IN FORECLOSURE RESCUE SCAM OPERATED FROM THE PHILIPPINES

Las Vegas, NV— Nevada Attorney General Catherine Cortez Masto announced today that defendant Michael Sinclair has pled guilty to one (1) Category B felony count of Mortgage Fraud in violation of NRS 205.372(2), for fraudulently operating a foreclosure rescue scam in Las Vegas under the business name of Federal Housing Aid.

In addition, Sinclair must pay $60,000 in restitution to the victims of the scam. Sinclair was recently extradited from the Philippines, where he fled after learning of the indictment against him.

“This is one more example of how mortgage fraud scammers prey on Nevadans,” said Attorney General Masto. “We will continue to send the message that these scammers are unwelcome in our State. We will find you and extradite you, if necessary, to see that justice is served.”

Using a call center located in the Philippines, Sinclair and his business partner, William Vargas, operated Federal Housing Aid, a company that claimed to offer loan modification services to assist victims in avoiding foreclosure on their homes. The operation had been in business since February 2007. The two defendants charged the victims between $899 and $1500 in upfront fees and offered a 100% money back guaranty, claiming their company would refund the money if the foreclosure could not be stopped. After paying for services, the defendants failed to provide the services paid for and failed to provide refunds as promised in their advertisements.

On November 3, 2009, Vargas pled guilty to one (1) Count of Theft-Obtaining Money in Excess of $250 by Material Misrepresentation from a person over the age of 60, a Category B Felony in violation of NRS 205.0832(1)(c), NRS 205.0835(3) and NRS 193.167 and one (1) Count of Attempted Theft-Obtaining Money in Excess of $250 by a material misrepresentation, a Gross Misdemeanor in violation of NRS 205.0832(1)(c), NRS 205.0835(3) and NRS 193.330. As part of his guilty plea, Vargas is required to pay restitution to the victims in the amount of $21,000.

Sentencing is scheduled for June 3, 2010 before Judge Villani in District Court Department 17

The case was investigated and prosecuted by the Attorney General’s Mortgage Fraud Task Force, which was created by Attorney General Masto in early 2008 to address mortgage fraud scams throughout Nevada. The task force works closely with other State agencies, including the Mortgage Lending Division, to investigate and prosecute mortgage fraud crimes in Nevada.

Consumers who wish to report mortgage fraud are asked to contact the Attorney General’s Bureau of Consumer Protection in Las Vegas at 702.486.3194 to obtain a complaint form.

FL AG Files Suit Against 2 Mod Companies

 TALLAHASSEE, FL – Attorney General Bill McCollum today announced that his office has filed a lawsuit against two Central Florida companies and their owner over allegations they charged up-front fees for foreclosure rescue-related services. National Payment Modification Company and The Bostonian Group, LLC, which conducts business under the name People’s First, allegedly charge up to $2,500 in up-front fees to homeowners trying to rescue their homes from foreclosure.

Also named in the lawsuit is William Rodriguez, the owner of both companies, who was a founding owner of Wineberg, Lopez, & Rodriguez Company. The Attorney General’s Office sued Wineberg, Lopez, & Rodriguez Company in March and obtained an emergency injunction barring the company from charging homeowners any fee in advance for providing foreclosure-related rescue services. That case is still pending in Orange County Circuit Court.

An investigation conducted by members of the Attorney General’s Economic Crimes Division, working as part of the Attorney General’s Mortgage Fraud Task Force, determined that both companies charge the up-front fee and divide it into five equal payments secured by post dated checks. Each check, according to the lawsuit, is associated with a separate “sub-contract” or step in the loan modification process. Consumers complained that both companies cash the post-dated checks even though the companies have not begun negotiations or even contacted the consumers’ lenders.

The Attorney General’s Office is seeking permanent injunctions prohibiting the companies from charging up-front fees, restitution on behalf of injured consumers, civil penalties of $15,000 for each violation, and reimbursement for attorney’s fees and costs related to the investigation. The Attorney General’s Office has filed numerous civil lawsuits to enforce the state law prohibiting companies from charging up-front fees for foreclosure-related rescue services and is currently investigating over 75 additional companies. More information about the lawsuits and information for homeowners is available online at: http://www.myfloridalegal.com/mortgagefraud.

Is the California DRE Even Relevant Anymore?

Since starting MFI-Mod Squad back in January, I have witnessed a lot of craziness from illegally-run loan modification companies. They’re often staffed by convicted felons, unlicensed lawyers, or government bureaucrats who confuse motion with action. 

 This has been most prevalent in California, which became a mecca for illegally-run and shady loan modification companies within the past twenty-four months. Under California statute, enforcement of the regulations that govern mortgage lending and modifications was the responsibility of the Department of Real Estate (DRE). 

 From November 2007 until September 2008, DRE did nothing to reign in the loan modification industry. It wasn’t until complaints began pouring in about these companies that DRE began requiring modification companies who charge an advance fee to have an advance fee agreement on file with them. That, however, didn’t stop the unethical practices committed by the vast majority of these companies. DRE’s advance fee requirements were hardly enforced.

 A perfect example of this was Loan Safe Solutions. The company was operated by Moe Bedard, a convicted felon whose DRE license was terminated when he was incarcerated. Bedard began Loan Safe Solutions after he left prison and operated it until May 2009, when his company lost its office space through eviction. It was commonly known in the modification and lending industry since the spring of 2008 that Bedard was operating outside DRE guidelines, but DRE did nothing. 

 See http://www.mfi-modsquad.com/would-you-hire-this-guy-to-do-your-loan-mod

 There are other shady companies that DRE did nothing to punish. Federal Loan Modification is another example. It was finally shut down after it was fined to death by the Federal Trade Commission (FTC). The FTC acted after being grilled by reporters about MFI-Mod Squad’s list of the twenty worst loan modification companies, which was published in April.

 See http://www.mfi-modsquad.com/bad-loan-modification-companies

 It wasn’t until early this year that DRE initiated a statewide dragnet against these companies because DRE was trying to keep the Governator’s bean counters at bay. Schwarzenegger’s people were looking for ways to do budget cuts and eliminate California’s massive $38 billion deficit. 

 Though good for a few blurbs on the Internet, this dragnet did little to actually scare these companies, which were working with equally unscrupulous law firms. 

 Due to actions initiated by other entities, the situation did eventually improve over the past several months. The California Attorney General’s office stepped in and began filing lawsuits against loan modification companies and requiring that $100,000 surety bonds be filed with their office.  The State Bar of California elected a new president. Her core mission was to bring integrity back into the legal profession, beginning with attorneys who charged advance fees for loan modifications and then failed to perform any work on the files. 

 Then, of course, SB 94 was introduced and was then signed by Schwarzenegger last week.  

With all these issues, is it fair to ask if DRE is even relevant? If they are, how can they be made more effective? Do they need new leadership and a new mandate?

Cal Bar Publishes Shame List of Mod Attorneys

The Cal Bar sent out the below press release shaming attorneys for collecting money from homeowners and then not getting them a modification.   There are some interesting names on it like Gregory Paiva who was once tight with our favorite covicted drug trafficker and wife beater turned mod company operator Moe Bedard.   There are also a few attorneys from United Law Group, who actually threatened to sue MFI-Mod Squad because they were put on MFI-Mod Squad’s 20 Worst Mod Company list back in April. 

San Francisco, September 18, 2009 — The State Bar of California, alarmed by the number of lawyers preying on vulnerable homeowners, today identified 16 attorneys who are under investigation for misconduct related to loan modification.

“In my 21 years in attorney discipline, I have not seen a crisis of this magnitude. It is truly unprecedented,” said Interim Chief Trial Counsel Russell Weiner, who is waiving investigation confidentiality in favor of public protection. The waiver, allowed by law, is used only occasionally, but Weiner said the seriousness of the problem demanded a strong reaction by the bar in order to protect consumers. This is the first time the names of more than a few lawyers being investigated have been made public.

 “The number of attorneys using their law licenses to essentially take money from unwary but trusting consumers is astounding,” Weiner added. “There are literally thousands of victims who have lost money they could not afford to lose. Under the circumstances, the need for public information and protection is paramount.”   

Those attorneys being named by the State Bar have allegedly taken fees for promised services and then failed to perform those services, communicate with their clients or return the unearned fees, Weiner said. Some attorneys misrepresented the services they could provide. “It appears these attorneys may have significantly harmed their clients who were already facing great financial pressure and the possible loss of their homes.”

 About one-quarter  – almost 800 cases –  of the active investigations in the Office of Chief Trial Counsel (OTC) are related to foreclosure complaints. The office has experienced a 58 percent increase in active investigations over 2008 due in large part to the huge increase in complaints against attorneys offering loan modification services. “Our office is aggressively investigating these cases and is working proactively with law enforcement,” said Weiner.

 In March of 2009, the State Bar created a special team of investigators and lawyers to handle the growing number of complaints received about attorneys offering loan modification services. OTC found that many of the offending attorneys are associated with firms that use telemarketers or phone banks to sign up clients without regard to the facts of the individual case or whether or not the client can be helped, Weiner said.

In many cases, the attorneys work with untrained non-attorney staff engaging in the unlawful practice of law by offering legal advice to prospective clients. OTC also is investigating the non-attorney staff for possible referral to law enforcement.

 In recent months, OTC has obtained the resignation of three attorneys who were offering loan modification services. Those attorneys chose to give up their licenses to practice law rather than face disciplinary charges and possible disbarment. In addition, OTC lawyers are preparing to put some attorneys on inactive status pending the filing of formal disciplinary charges

Weiner warned consumers to take special caution when seeking legal representation related to loan modification. “Consumers should not be comforted by advertisements that claim the attorney is a member of the State Bar of California,” he said, noting that all attorneys practicing in California on a regular basis are members. “Such membership does not mean the attorney has any special knowledge, experience or expertise in the area of loan modification. In fact, it appears that many of the attorneys offering these services have little or no prior experience in the area of loan modification.” 

 The following attorneys have received a significant number of complaints related to the loan modification services they were hired to perform. They are entitled to a full and fair hearing on any charges that may be filed in the future. No discipline may be imposed unless and until the State Bar proves allegations of misconduct by clear and convincing evidence. 

• David Arase, Bar No. 233705, Arase Law Firm and National Housing Assistance
• Stephen Burns, Bar No. 113371, Legal Group Network
• Robert Buscho, Bar No. 122556, United Law Group
• Nicholas Chavarela, Bar No. 251632, Rodis Law Group and America’s Law Group
• Steven Feldman, Bar No. 103676, Feldman Law Center
• Steven Feldman, Bar No. 224065, Avantgarde Group
• Paul Lucas, Bar No. 163076, Lucas Law Center
• Brandon Moreno, Bar No. 233750, U. S. Foreclosure
• Jeffrey Nemerofsky, Bar No. 213014, U.S. Advocacy Law Group and U.S. Financial Products
• Gregory Paiva, Bar No. 207218, Law Offices of Gregory Paiva
• Adrian Pomery, Bar No. 249664, U.S. Foreclosure
• Ronald Rodis, Bar No. 181873, Rodis Law Group and America’s Law Group
• Mark Shoemaker, Bar No. 134828, Advocates for Fair Lending
• Marc Tow, Bar No. 78429, Marc Tow and Associates
• Michael Yellin, Bar No. 255050, A Fresh Start Loan Modification
• Sean Rutledge, Bar No. 255938, United Law Group

The State Bar suggests that consumers be wary of attorneys offering loan modification services under any of the following circumstances:

• Advertisements of the office do not expressly identify by name the attorney who is responsible for the business.
• Office staff will not readily identify by name the attorney responsible for oversight of the business.
• The attorney in charge of the office is too busy or not willing to meet personally with prospective clients.
• The firm advises a consumer to stop paying the existing mortgage.
• The business, through its advertisements or claims of its representatives, makes  claims that sound too good to be true, such as claims of a 90 or 100 percent rate of success in obtaining loan modifications, or claims that a reduction in the mortgage principal is likely to be achieved. 
• The business demands payment of a large fee, even before obtaining a prospective client’s basic income and expense information, and information about the existing mortgage and present home value.
• The attorney responsible for the business is not licensed to practice law in the state where the consumer resides.

 There are legitimate loan modification services and ethical attorneys that are providing the promised services for their clients. Two places to start in the search for loan modification assistance are: HUD Housing Counselors, 800-569-4287, http://www.hud.gov/counseling; and HOPE NOW, 888-995-HOPE, http://www.hopenow.com. 

 Consumers can also find qualified attorneys through a State Bar-certified lawyer referral service that can be found on the State Bar’s Web site (www.calbar.ca.gov), or by calling the State Bar’s Lawyer Referral Services Directory at 1-866-442-2529 (toll free in California) or 415-538-2250 (from outside California).

Consumers having a problem with the attorney handling their loan modification may contact the State Bar at 1-800-843-9053 or visit the State Bar’s Web site at www.calbar.ca.gov to find a complaint form.

FOX 5 in NY Nails The Scumbags At Amerimod

Hopefully Andrew Cuomo can throw these guys behind bars soon. 

See the piece here:

http://www.clipsyndicate.com/video/play/1098979/foreclosure_rescue_company_lawsuits

FTC Fines United Home Savers in Florida $4.1M but settles on $21,694

The Federal Trade Commission has put a stop to a deceptive foreclosure “rescue” operation that charged homeowners $1,200 based on the false promise that it could save them from losing their homes.

The operators of the business are barred from any further deceptive practices under a settlement with the FTC. The agency charged them with violating the FTC Act by falsely claiming that they would prevent homes from being foreclosed in virtually all instances or refund most of the $1,200 fee. In most cases the defendants neither stopped foreclosure nor provided promised refunds.

The settlement prohibits the defendants from misrepresenting any fact material to a consumer’s decision to purchase a foreclosure rescue service, including that they can prevent or postpone any foreclosure; the likelihood that their foreclosure rescue will succeed; the degree of past success of any foreclosure rescue efforts; the likelihood that a consumer will get a refund if the rescue effort fails; that they can help all consumers, regardless of their individual circumstances; the number of satisfied customers or customer complaints; the terms of any refund or guarantee; any endorsement or rating by the Better Business Bureau or any other consumer association.

The order imposes a $4.1 million judgment, which will be suspended upon transfer of $21,694 in bank account funds that were frozen by the court. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition. The settlement bars them from selling or otherwise disclosing personal information about anyone whose information they obtained during their operation. The settlement also contains record-keeping and reporting provisions to monitor their compliance.

The defendants are Stephanie Dietschy, Darin Dietschy, and United Home Savers, LLC, all based in Florida. The Commission vote to authorize staff to file the stipulated final order was 4-0. The document was filed in the U.S. District Court for the Middle District of Florida, and was entered by the court on August 19, 2009.

NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

CT & FL AG Targets 2 Mod Companies Claiming Partnership With Law Firms

Diane Lade of the  South Florida Sun-Sentinel wrote an article about how the Connecticut and Florida AG’s offices are investigating First Legal/Nationwide Home Relief.  The Florida AG is investigating both First Legal/Nationwide Home Relief and Housing Assistance Law Center. 

http://www.sun-sentinel.com/business/custom/consumer/sfl-sfl-foreclosure-law-082309sbaug23,0,6462732.story?page=1

The Florida Bar posted an advisory back in March advising attorneys what they can and cannot do when doing business with modification companies:

ETHICS ALERT:

PROVIDING LEGAL SERVICES TO DISTRESSED HOMEOWNERS

 The Florida Bar’s Ethics Hotline recently has received numerous calls from lawyers who have been contacted by non-lawyers seeking to set up an arrangement in which the lawyers are involved in loan modifications, short sales, and other foreclosure-related rescue services on behalf of distressed homeowners. These non-lawyers include mortgage brokers, financial management advisors, foreclosure “consultants” and others who engage in foreclosure related rescue services or other similar services. Non-lawyers have proposed a variety of agreements, even offering to hire lawyers as “in-house counsel” to provide services to the non-lawyer’s customers. The Foreclosure Rescue Act, Section 501.1377, Florida Statutes, went into effect October 1, 2008 and imposed restrictions on non-lawyer loan modifiers to protect distressed homeowners. The new statute appears to be the impetus for these inquiries.

Lawyers should be wary of these proposals, as many violate the ethics rules and may subject the lawyer to discipline. Florida Bar members:

• Cannot pay a referral fee or give anything of value to a non-lawyer for referring distressed homeowners to the lawyer. [Rule 4-7.2(c)(14)]
• Cannot be paid by a non-lawyer to provide services to distressed homeowners. [Rule 4-5.4(a)]
• Cannot directly or indirectly divide fees with a non-lawyer. [Rule 4-5.5(a)]

 Cannot assist in the unauthorized practice of law by:

• providing legal services for a distressed homeowner while employed as in-house counsel for a non-lawyer company;
• forming a company with a non-lawyer to perform foreclosure related services if any of the services are the practice of law; or
• assisting a non-lawyer individual or company in providing services that the individual or company is not authorized to provide or are otherwise illegal.

[Rule 4-5.5(a)]

• Cannot assist a non-lawyer in violating the provisions of the Foreclosure Rescue Act, Section 501.1377, Florida Statutes. [Rule 4-8.4(d)]
• Cannot directly contact distressed homeowners to offer representation (including by telephone or facsimile) and cannot allow someone else to directly contact distressed homeowners on the lawyer’s behalf. [Rules 4-7.4(a) and 4-8.4(a)]
• Cannot accept referrals from non-lawyers acting in the guise of a “lawyer referral service” (legitimate lawyer referral services must comply with a rule which requires all advertisements and contact with prospective clients to be in compliance with the attorney advertising rules, in addition to other requirements) [Rule 4-7.10]
• Must have a direct relationship with distressed homeowners who hire the lawyer for representation. [Rules 4-1.1, 4-1.2 and 4-1.4]
• Cannot allow a non-lawyer to choose a lawyer for a distressed homeowner or direct a lawyer’s representation of a distressed homeowner. [Rules 4-1.1, 4-1.2, 4-1.4, and 4-5.5(a)]

 Several ethics opinions, Opinions 92-3 and 95-1 in particular, discuss similar proposals and the ethics problems that arise when lawyers enter business arrangements with non-attorneys. These opinions can be accessed on the Florida Bar’s website by selecting “ethics opinions” then “list of Florida Ethics Opinions by number.”

 This alert does not address every potential problem or concern. Lawyers should not assume that conduct is permissible merely because it is not listed above. If you are a Florida Bar member with specific questions about your own conduct related to this type of situation, you should contact The Florida Bar Ethics Hotline at (800) 235-8619.

 This alert also does not address the issue of what conduct by non-lawyers is permissible. Questions regarding whether conduct of non-lawyers constitutes the unlicensed practice of law should be directed to The Florida Bar Unlicensed Practice of Law Department at (850) 561-584

Andrew Cuomo To Amerimod: Arrivederci, Baby!

NEW YORK, NY (August 13, 2008) – Attorney General Andrew M. Cuomo today announced that his office has filed a lawsuit against New York-based American Modification Agency, Inc. (“Amerimod”), one of the largest foreclosure rescue companies in the country, and its owner Salvatore Pane, Jr. for engaging in a wide variety of deceptive business practices and false advertising to induce beleaguered homeowners on the brink of foreclosure to sign up for their services. Today’s lawsuit is part of Cuomo’s ongoing investigation into foreclosure rescue scams that target New York homeowners.

Attorney General Cuomo’s investigation into Amerimod revealed that while claiming to modify home mortgage loans and lower monthly payments of consumers on the brink of foreclosure, Amerimod typically falls short on its promises. In fact, after Amerimod collects illegal, up-front fees, the homeowners often find themselves in worsened circumstances with respect to their mortgages and unable to obtain accurate information from Amerimod’s representatives or other customer service. The lawsuit seeks refunds and damages for Amerimod’s customers who were charged illegal up-front fees and were deceived by the company’s empty promises, misleading representations, and false advertising. It also seeks to shut down the company’s New York operations.

“Amerimod shamelessly took advantage of thousands of vulnerable homeowners desperately trying to save their homes,” said Attorney General Cuomo. “By charging up-front fees and making misleading and deceptive claims about its ability to prevent foreclosure, Amerimod blatantly ignored the law and tried to squeeze the last dollars from struggling consumers nationwide. My office is determined to obtain relief for these individuals and families, and to prevent Amerimod and other foreclosure rescue companies from continuing to engage in this kind of unlawful conduct.”

The lawsuit asserts that Amerimod:

• Fails to obtain loan modifications for the vast majority of its customers, many of whom end up in foreclosure or negotiate loan modifications on their own.
• Illegally charges thousands of dollars in up-front fees, and fails to refund these fees as promised when loan modifications are not obtained.
• Engages in deceptive and misleading practices by grossly exaggerating its success rate, making false promises about its ability to save customers’ homes, underestimating the amount of time it takes to achieve a loan modification, and misrepresenting that the company is a law office and that lawyers will work on customers’ files.
• Makes false guarantees of 100% customer service when, in fact, once Amerimod has collected its up-front fees, its representatives often fail to return calls of customers facing imminent foreclosure who are desperately seeking a status update on their files.
• Makes false and misleading statements on its website, in newspaper advertisements, and in radio advertisements.
• Fails to include legally required disclosures and notices in its customer contracts, including notice of a customer’s right to cancel a contract within five business days.
• Provides detrimental advice to customers, such as recommending that they stop making monthly mortgage payments, ignore communications from their lenders and avoid consulting with non-profit housing counseling agencies.
• Targets Spanish-speaking consumers who are signed up by Spanish-speaking representatives, and then fails to provide the consumers Spanish-language contracts as required by law.

Amerimod’s central office is in Uniondale, NY, and it has had more than ten branch offices throughout the state, as well as offices in various states throughout the United States. The lawsuit seeks a court order directing Amerimod to stop marketing and providing loan modification services in New York State, provide an accounting of customer fees, pay refunds and damages to all injured customers, and pay monetary penalties to the State.

The lawsuit against Amerimod is part of Cuomo’s wide-ranging investigation into the so-called “foreclosure rescue” industry. To date, Cuomo’s office has issued subpoenas to 18 other loan modification companies that have targeted New York homeowners facing the risk of losing their homes.

For more tips, see the Attorney General’s brochure, “Avoid Foreclosure and Rescue Scams”: http://www.oag.state.ny.us/features/foreclosure_rescue_scams/brochure_download.html.

The lawsuit against Amerimod is being handled by Special Counsel Mary Alestra, Assistant Attorneys General Brian Montgomery, Laura Levine, and Stephanie Sheehan, and Senior Enforcement Counsel David Holgado of the Bureau of Consumer Frauds & Protection under the supervision of Bureau Chief Joy Feigenbaum.

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