The Attorney General of Arizona has filed a complaint against Mortgage Capital USA and its CEO, Gustavo Anaya, for allegedly conducting an illegal home loan modification scheme involving multiple business entities.
The complaint, which was filed in Pima County Superior Court, claims that this scheme took money from distressed homeowners who needed foreclosure assistance or loan modification services and then failed to deliver their promises.
Services offered by the defendants in this alleged scam included contacting a creditor, attempting to arrange an extension for a homeowner to cure a default, note, mortgage or deed of trust, delay postponement of the time of a foreclosure sale and give advice to a homeowner regarding a mortgage or lien that is facing foreclosure.
However, Anaya did not have a state or federal license to provide foreclosure consultant and loan modification services. The AG said the alleged scheme began around April 2010 and lasted through January 2011.
To gain a consumers confidence, defendants often falsely hold themselves out as being, or employing, attorneys who will work to stop a foreclosure or obtain a loan modification for the consumers, the complaint said.
According to the complaint, Anaya uses the businesses Mortgage Capital USA, Executive Capitals, American Mortgage USA and the Law Offices of Gustavo Anaya interchangeably to get the money from a homeowner and then let the foreclosure take place while the consumer remains unaware of what is taking place.
The complaint said the defendants contract agreement included a document that said “please note: a deposit is due before we start your case.” Defendants charged consumers total fees ranging from $500 to $3,500 for their services, with the majority of this being paid upfront, which is prohibited by state and federal law.
The defendants allegedly targeted Spanish-speaking homeowners who did not understand English proficiently. The complaint claims that the defendants issued the consumers a written contract agreement in English, but told them in Spanish to do different services than what was contained in the contract documents.
For example, the defendants supposedly told the homeowners to stop paying their monthly mortgage payments while the contract told them to continue making their payments. Additionally, the defendants guaranteed specific results to the consumer in Spanish but the written contract disclaimed any guarantee to fulfill any promises that were made.
As part of the scheme, the defendants also distributed business cards to homeowners as Desert State Mortgage Loan Modifications-Law Offices of John Blischak, claiming to provide consumers with attorney services in order to help them receive their modification.
However, Raul Harris, the manager of Desert State Mortgage, said in the complaint that he had no connection with this scheme and never engaged in loan modification activities on behalf of the defendants or authorized Anaya to use his company's name on their business contracts.
Blischak represented Anaya until September 2011 and he also said in the complaint that his office “never engaged in performing foreclosure consultant services or loan modifications for Mortgage Capital consumers.”
On Jan. 25, Blischak sent a letter to Anaya, Mortgage Capital and DSM telling them to “immediately destroy any and all paperwork reflecting my name with any address in Las Vegas or Phoenix.”
“My role is limited to representing your company in any complaints that may arise with customers. Most importantly, a letter with a contract addendum needs to be sent to all present and past customers from Arizona that have my name as the responsible party. I had no idea that was being done and I cannot be responsible for the same.”
Despite these warnings from Blischak, as well as a cease and desist letter sent by Harris to Anaya, the defendant allegedly continued to conduct business using DSM's and Blischak's name. Meanwhile, almost all consumers who used Anaya's services made their fees payable to Mortgage Capital.
Homeowners said in the complaint that after they made an initial downpayment and issued checks to Mortgage Capital, the company could not be reached to learn the status of their loan negotiations. The consumer also learned from their servicer that the defendants never reached out to the servicer or had limited contact with them.
A Mortgage Capital representative (who answered the phone in Spanish) disconnected the line when National Mortgage News asked for comment regarding this complaint.
