AG Takes On Rescue Firms
New York-Following in the footsteps of the California attorney general's office, the Georgia Department of Banking and the U.S. attorney's office for the Southern District of Florida, New York attorney general Andrew Cuomo is going after foreclosure rescue companies that allegedly target vulnerable homeowners.
The foreclosure rescue company that AG Cuomo's office most recently filed suit against is Uniondale, N.Y.-based American Modification Agency Inc., and its owner and president, Salvatore Pane Jr., for allegedly charging illegal upfront fees and engaging in consumer fraud. According to AG Cuomo's office, the company, which operates in all 50 states, allegedly targets homeowners facing foreclosure by claiming that it can save their homes, but often fails to provide the services promised.
The AG's investigation into Amerimod, which stems from a larger investigation into the foreclosure rescue industry, found that the company charges homeowners heavy upfront fees in advance of providing any services, a violation of New York law. In addition, he claims the company uses misleading advertising full of unsubstantiated claims that it has success rates of 90%-100% and that it is fully licensed.
Amerimod also allegedly fails to provide contracts that include required notice of right to cancel, and fails to provide Spanish-speaking consumers with Spanish contracts, also in violation of New York law.
Amerimod insisted upon its integrity in a written statement, claiming, "For approximately a year now, Amerimod has been working hand-and-hand with the New York attorney general's office, as well as other state officials, in order to remain compliant with varying state specific laws, which pertain to the practices of foreclosure assistance."
Meanwhile, the New York AG's office has subpoenaed 14 other loan-modification-related firms. The companies are American Home Recovery Corp.; CloseMore Financial Corp.; Elite Results Group Inc.; FLM Law Center LLP, a k a Federal Loan Modification Law Center and Federal Loan Modification; Hometown U.S.A. Inc.; Global Modifications Inc., a k a the law office of Brett Margolin PC; Loan Modification Affiliate Exchange Ltd, a k a LoanMAE; Nationwide Modification Agency Inc.; NMA Legal Services PC; Northeast Mortgage Services; People's First Financial Inc.; Raymond Lewis & Fitch Inc.; Settled For Less Inc.; and the Law Depot Inc., a k a the Loss Mitigation Legal Network.
The subpoenas include requests designed to uncover, among other information, the companies' marketing strategies, representations made to customers regarding the services the companies provide and their success rates, fee structures, whether contracts are provided in accordance with the law and what, if any, services are actually performed.
Capitalizing on the current economic downturn and housing crisis, AG Cuomo's office contends that these companies scour foreclosure notices and filings and prey on consumers desperate to save their homes from being foreclosed. The companies allegedly promise that they will negotiate with the consumers' banks to lower mortgage interest rates, lock-in fixed rates, get late fees and past due payments forgiven, and even reduce principal balances.