Bay State AG Settles One, Files Another Civil Suit In Effort To Pursue Upfront Fee Loan Modification Rackets; Allegations In Latest Filings Include Charge Of Unlicensed Practice Law

From the Office of the Massachusetts AG:

• Following separate actions brought by her office this week against two financial companies and a law partnership, Attorney General Martha Coakley is warning consumers about potential scams that attempt to take advantage of struggling homeowners.
  
  Both cases allege unfair and deceptive acts and practices in connection with foreclosure-related services, including improper charging of advance fees. Under Massachusetts law, consumers should not be charged advance fees for foreclosure-related services.
  
  “We allege these defendants preyed on distressed homeowners, often requesting advanced payment in violation of the law,” AG Coakley said. “We continue to see many foreclosure and loan modification scams that prey upon borrowers who are desperately trying to save their homes. Homeowners should be aware of their rights and know that our office has resources available to help them.”
  
  In the first action, a Brighton company and related law firm have agreed to pay a total of $20,000 in restitution to consumers and the Commonwealth for allegedly charging illegal advance fees for loan modifications. According to an assurance of discontinuance, filed [] in Suffolk Superior Court, iMod Corporation (iMod), and Lombardi and Stephenson, an affiliated law firm, charged Massachusetts residents advance fees for foreclosure-related services. In addition to restitution for consumers, the defendants have agreed to no longer charge consumers advance fees for foreclosure-related services, and will notify potential clients that free loan modification services are available.
  
  In the second action, a Lawrence financial company and its owner have been sued for using the foreclosure crisis to prey upon homeowners and provide legal advice without a license.
  
  According to the lawsuit, filed in Suffolk Superior Court on Wednesday, Pinnacle Financial Consulting, LLC (Pinnacle), and its owner, Robert Burton (Burton), allegedly engaged in unfair or deceptive conduct while marketing, soliciting and providing loan modification, bankruptcy petition preparation and financial advising services.
  
  The allegations include misrepresenting to consumers the services they could provide, exaggerating the benefits of their services, charging unlawful advance fees, practicing law without a license, failing to take any action to provide the promised services after receiving payment, and refusing to provide refunds upon request.
  
  Defendants allegedly targeted minority and non-native English speakers desperate to save their homes from foreclosure. The AG’s Office has obtained a temporary restraining prohibiting the defendants from dissipating or concealing assets and destroying records.

For the Massachusetts AG press release, see AG Coakley Targets Financial Companies for Predatory Loan Practices, Warns Homeowners About Foreclosure Relief Scams (AG’s Office Obtains $20,000 Settlement with iMod Corporation, Files Lawsuit Against Pinnacle Financial for Soliciting Massachusetts Consumers with Foreclosure Relief Scams).