Massachusetts AG Obtains Temporary Restraining Orders Against Two Firms For Allegedly Soliciting Illegal Upfront Fees For Loan Modification Services
In Boston, Massachusetts, Legal Newsline reports:
- Attorney General Martha Coakley has obtained temporary restraining orders against a Wyoming and Florida company, and a Florida man for soliciting unlawful fees from homeowners facing foreclosure.The defendants, H.O.P.E. Alliance, Inc., (H.O.P.E. Alliance) Law & Associates, LLC and Thomas E. Law, II, allegedly solicited unlawful advance fees for foreclosure-related services, and unnecessarily delayed negotiations regarding loan modifications.
- The complaint also alleges that H.O.P.E. Alliance, with the help of the co-defendants sent letters that directed them to a toll-free number and to the Web site www.helpnowalliance.org, which fraudulently claimed that the company was a non-profit and H.O.P.E. Alliance deceptively used a similar name to the government-sponsored non-profit organization, HOPE NOW
Alliance.(1)
For more, see Coakley gets temporary restraining orders over fraudulent foreclosure-related services.
For the Massachusetts Attorney General's press release, see AG Obtains Temporary Restraining Order Against WY and FL Companies and FL Man for Soliciting Unlawful Fees From Homeowners Facing Foreclosure.
(1) According to the Massachusetts Attorney General, the website also states that H.O.P.E. Alliance is a
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Massachusetts Halts False Foreclosure "Rescue" Activity
Firm claimed to be "non-profit"
June 22, 2009
One by one, the state of Massachusetts is targeting firms that claim they can "rescue" distressed homeowners from impending foreclosure. The Massachusetts Attorney Generals office has obtained a preliminary injunction against defendants H.O.P.E. Alliance, Inc., (H.O.P.E. Alliance), Law & Associates, LLC and Thomas E. Law, II.
The preliminary injunction prohibits the defendants from publishing advertisements concerning foreclosure-related services, contacting Massachusetts consumers regarding foreclosures or mortgages, and taking and/or soliciting advance fees from consumers. The preliminary injunction follows a temporary restraining order granted against the defendants in early June.
In a complaint centers on the all-too-common practice of soliciting unlawful advance fees for foreclosure-related services, and unnecessarily delayed negotiations regarding loan modifications. The two together, says Massachusetts Attorney General Martha Coakley, usually pushes homeowners further into debt.
The complaint also alleges that H.O.P.E. Alliance, with the help of co-defendants Law & Associates, LLC, and Thomas E. Law, II, solicited homeowners facing foreclosure by sending letters that directed them to a toll-free number and to the website www.helpnowalliance.org.
The website states that it is an alliance of nonprofit organizations and housing counselors that can assist homeowners in obtaining a loan modification or stopping foreclosure. The website also states that it is a 501 (c) (3) non-profit organization.
"H.O.P.E. Alliance is not registered with the IRS or the Attorney General's Office as a non-profit," Coakley said. The Attorney General's complaint also asserts that in its letter to homeowners, H.O.P.E. Alliance deceptively used a similar name to the government-sponsored non-profit organization, HOPE NOW Alliance.
During telephone calls with consumers, defendants apparently attempted to skirt the law by asking for a "donation" instead of a fee, but Coakley says the request is still an unlawful fee. Defendants also allegedly promised to obtain loan modifications for consumers, and then after months of delay either failed to provide any services or only provided inadequate assistance to homeowners.
http://www.consumeraffairs.com/news04/2009/06/ma_foreclosure_scams.html
ILLINOIS ATTORNEY GENERAL SUES 14th COMPANY FOR MORTGAGE RESCUE FRAUD
Chicago – Illinois Attorney General Lisa Madigan today continued her aggressive legal fight against mortgage fraud by filing a lawsuit against a Clearwater, Fla., company which operates a rescue fraud scheme that preys on vulnerable homeowners on the verge of foreclosure. This is the 14th lawsuit Attorney General Madigan has brought against mortgage rescue fraud companies.
Madigan filed suit in Cook County against Law & Associates LLC, and its managing member, Thomas E. Law, II, alleging the defendants violated the Mortgage Rescue Fraud Act and the Consumer Fraud and Deceptive Business Practices Act by falsely promising to help consumers save their homes after falling behind on their mortgage payments. According to the complaint, the defendants charged consumers up to $1,900 and promised to provide mortgage foreclosure rescue services that they either failed to perform the services or only performed ineffective services. Attorney General Madigan’s Consumer Fraud Bureau has directly received one complaint relating to the defendant and 68 complaints referred from the Better Business Bureau.
Madigan’s lawsuit alleges Law & Associates market mortgage rescue services to at-risk homeowners, encouraging them to call a toll-free number where they are told there is an upfront fee of $1,990 for mortgage rescue services. Consumers who indicate they cannot afford the charge are offered a reduced rate of $1,800 on a payment plan that must be paid in full prior to them receiving any mortgage rescue services. The defendants also promise desperate homeowners that the service fee is refundable if the company is not able to successfully negotiate an agreement with the homeowners’ mortgage lenders or provide a “viable strategy” to avoid foreclosure. The lawsuit alleges the defendants fail to provide the services promised and fail to refund the service fee.
The lawsuit is part of Madigan’s ongoing work to curtail the foreclosure crisis and help Illinois families stay in their homes. Madigan’s office has sued 14 mortgage rescue companies to stop deceptive practices and successfully participated in three multi-state settlements against major subprime lenders: Household Finance, Ameriquest and First Alliance Mortgage Company. To date, Madigan’s office has obtained nearly $900 million in enforcement actions against these lenders.
Last year, Madigan announced a comprehensive strategy to address the looming home foreclosure crisis in Illinois. As part of this effort, Madigan’s office hosted a statewide home ownership preservation summit in July 2007, bringing together more than 100 participants from the mortgage lending industry, consumer advocacy groups and government agencies to identify problems and look for solutions to mortgage foreclosures.
On the legislative front, Madigan worked to pass the High Risk Home Loan Act of 2003, and drafted the Mortgage Rescue Fraud Act of 2006, which was designed to deter scam artists from preying on vulnerable homeowners on the verge of foreclosure. The Attorney General also initiated and drafted the Illinois Homeownership Protection Act, a new law that tightens controls on brokers and lenders to prevent consumers from being unwittingly locked into questionable loan terms.
Madigan also has sued mortgage giant Countrywide Home Loans, Inc., for deceptive and fraudulent loan origination practices. Additionally, she has issued fair lending subpoenas to Countrywide and Wells Fargo Financial Illinois, Inc., to determine whether these companies steered African American and Latino borrowers into higher cost or otherwise inappropriate home loans in violation of fair lending and civil rights laws.
http://www.illinoisattorneygeneral.gov/pressroom/2008_08/20080828.html
TALLAHASSEE -- Attorney General Bill McCollum today sued a Clearwater business, alleging it engaged in deceptive and unfair practices by charging for foreclosure consulting services but failing to provide the assistance promised.
According to the lawsuit, Law & Associates, LLC claimed it could help homeowners who were facing foreclosure and charged an up-front cash fee of approximately $1,500 to $2,000.
Consumers reported to the Attorney Generals Office that the company not only failed to provide promised services but also refused to refund the fee despite an advertised money-back guarantee.
More citizens in Florida are facing the very real possibility of losing their homes to foreclosure than anywhere else in the country, said Attorney General McCollum. "My office will continue working to ensure that businesses who offer assistance to these people are held accountable to the law," said McCollum.
Law & Associates sends direct mailers to individual homeowners who are facing foreclosure. The mailers allegedly tell the homeowners they must call the company within 72 hours to see if they are eligible for a plan to stop the foreclosure process.
The company also advertises online, allegedly promising to stop the foreclosure process and providing a money-back guarantee if they do not achieve a viable strategy with the lender to stop the foreclosure.
When homeowners contact Law & Associates, they are allegedly told they qualify for a plan to stop foreclosure but must pay the hefty cash fee for Law & Associates to take their case.
Once a homeowner pays the fee, he or she purportedly receives a written contract from Law and Associates that contains numerous terms and conditions not previously disclosed to the customer.
According to the lawsuit, most of those terms and conditions are designed to prevent a homeowner from being entitled to a refund if Law & Associates is not successful in stopping the foreclosure. The Attorney Generals office has received more than 65 complaints from consumers about Law & Associates.
The Attorney Generals lawsuit alleges six counts against Law & Associates and Thomas E. Law, II for violations of Floridas Deceptive and Unfair Trade Practices Act. The Attorney General is seeking penalties of $10,000 per violation and reimbursements for consumers who paid the fees.
The lawsuit also asks the Court to require the company to cease its operations.
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