Summit Realty

Mortgage Fraud CONSUMER ALERT

Beware the latest fraud: Lawyers advertising that homeowners can join a so-called “Mass Joinder” lawsuit for loan modification and mortgage rescue. Vulnerable homeowners are tempted in these scams to pay lawyers to add them to mass lawsuits against lenders. Homeowners beware—this is a scam.

•Do not pay up-front fees to anyone promising to modify your loan. That’s illegal—and unlikely to work.

•No one can guarantee you a reduction in principal or a settlement with a bank. Watch out for people making extravagant claims and alluring offers about mortgage relief, or asking to pay a retainer without talking to an ABA-licensed lawyer and checking their reputation with the Better Business Bureau.

•You can research any lawyer by searching their record at the State Bar’s website: http://calbar.ca.gov

If you have questions about how to proceed with your current mortgage situation, please consult a non-profit counselor certified by the US Department of Housing and Urban Development. A list of certified counselors can be found at http://hud.gov .

IF YOU FEEL YOU ARE A VICTIM OF THIS SCAM:
The CA State Bar has created dedicated, confidential hotlines for potential victims. Clients of Philip A. Kramer, call: 213-765-1672; of Mitchell J. Stein, call: 213- 765-1639; of Paul W. Petersen, call: 213-765-1641; of Christopher J. Van Son, call: 213-765-1658

For Additional Assistance, Call: 1-888-995-HOPE (4673)

Tags: Better Business Bureau, housing fraud, How to avoid fraud, how to avoid housing fraud, loan modification CA, loan modification fraud, loan modification scams, loan modification tips, mortgage fraud

Attorney General Kamala D. Harris Sues Law Firms Engaged in National “Mass Joinder” Mortgage Fraud

SAN FRANCISCO — Attorney General Kamala D. Harris today announced that the California Department of Justice, in conjunction with the State Bar of California, has sued multiple entities accused of fraudulently taking millions of dollars from thousands of homeowners who were led to believe they would receive relief on their mortgages.

Attorney General Harris sued Philip Kramer, the Law Offices of Kramer & Kaslow, two other law firms, three other lawyers, and 14 other defendants who are accused of working together to defraud homeowners across the country through the deceptive marketing of “mass joinder” lawsuits. “Mass joinder” lawsuits are lawsuits with hundreds, or more, individually named plaintiffs. This is the first consumer action by the Attorney General’s Mortgage Fraud Strike Force.

Kramer’s firm and other defendants were placed into receivership on Monday, Aug. 15. The legal actions were designed to shut down a scheme operated by attorneys and their marketing partners, in which defendants used false and misleading representations to induce thousands of homeowners into joining the mass joinder lawsuits against their mortgage lenders. Defendants also had their assets seized and were enjoined from continuing their operations. Nineteen DOJ special agents participated as the firms were taken over Wednesday, Aug. 17, along with 42 agents and other personnel from HUD’s Office of Inspector General, the California State Bar, and the Office of Receiver Thomas McNamara at 14 locations in Los Angeles and Orange Counties. Sixteen bank accounts were seized.

“The defendants in this case fraudulently promised to win prompt mortgage relief for millions of vulnerable homeowners across the country,” said Attorney General Harris. “Innocent people, already battered by the housing crisis, were targeted for fraud in their moment of distress.”

“The number of lawyers who have tried to take advantage of distressed homeowners in these tough economic times is nothing short of shocking,” said State Bar President William Hebert. “By taking over the practices of four attorneys accused of fraudulent marketing practices, the State Bar can put a stop to their deplorable conduct as part of our ongoing effort to protect the public.”

It is believed that at least two million pieces of mail were sent out by defendants to victims in at least 17 states. Defendants’ revenue from this scam is estimated to be in the millions of dollars.

As alleged in the lawsuit, defendants preyed on desperate homeowners facing foreclosure by selling them participation as plaintiffs in mass joinder lawsuits against mortgage lenders. Defendants deceptively led homeowners to believe that by joining these lawsuits, they would stop pending foreclosures, reduce their loan balances or interest rates, obtain money damages, and even receive title to their homes free and clear of their existing mortgage. Defendants charged homeowners retainer fees of up to $10,000 to join as plaintiffs to a mass joinder lawsuit against their lender or loan servicer.

Consumers who paid to join the mass joinder lawsuits were frequently unable to receive answers to simple questions, such as whether they had been added to the lawsuit, or even to establish contact with defendants. Some consumers lost their homes shortly after paying the retainer fees demanded by defendants.

This mass joinder scam began with deceptive mass mailers, the lawsuit alleges. Some mailers, designed to appear as official settlement notices or government documents, informed homeowners that they were potential plaintiffs in a “national litigation settlement” against their lender. No settlements existed and in many cases no lawsuit had even been filed. Defendants also advertised through their web sites.

When consumers contacted the defendants, they were given legal advice by sales agents, not attorneys, who made additional deceptive statements and provided (often inaccurate) legal advice about the supposedly “likely” results of joining the lawsuits. Defendants unlawfully paid commissions to their sales representatives on a per client sign-up basis, a practice known as “running and capping.”

Defendants’ alleged misconduct violates the following laws:
-False advertising, in violation of section 17500 of the Business and Professions Code
-Unfair, fraudulent and unlawful business practices, in violation of section 17200 of the Business and Professions Code
-Unlawful running and capping, in violation of section 6152, subdivision (a) of the Business and Professions Code (i.e., a lawyer unlawfully paying a non-lawyer to solicit or procure business)
-Improper fee splitting (defendants unlawfully splitting legal fees with non-attorneys)
-Failing to register with the Department of Justice as a telephonic seller.

Homeowners who have paid to be added to one of the lawsuits should contact the State Bar if they feel they may be victims of this scam. They can also contact a HUD-certified housing counselor for general mortgage related assistance.

The Department of Justice has seized the practices of the following non-attorney defendants:
Attorneys Processing Center, LLC; Data Management, LLC; Gary DiGirolamo; Bill Stephenson; Mitigation Professionals, LLC; Glen Reneau; Pate Marier & Associates, Inc.; James Pate; Ryan Marier; Home Retention Division; Michael Tapia; Lewis Marketing Corp.; Clarence Butt; and Thomas Phanco.

The State Bar has seized the practices and attorney accounts of the attorney defendants:
The Law Offices of Kramer & Kaslow; Philip Kramer, Esq; Mitchell J. Stein & Associates; Mitchell Stein, Esq.; Christopher Van Son, Esq.; Mesa Law Group Corp.; and Paul Petersen, Esq.

Attorney General Harris is challenging the defendants’ alleged misconduct in marketing their mass joinder lawsuits; her office takes no position as to the legal merits of any claims asserted in the mass joinder lawsuits filed by defendants.

Victims in the following states are known to have received these mailers, or signed on to join the case. This is a preliminary list that may be updated:

Alaska, Arizona, California, Colorado, Connecticut, Florida, Hawaii, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Texas, Washington

The complaint, temporary restraining order, examples of marketing documents and photos of the enforcement action are available with the electronic version of this release at http://oag.ca.gov/news.

Information provided by State of California Dept of Justice

Tags: California Department of Justice, Fraud, How to avoid fraud, how to avoid housing fraud, loan modification fraud, mortgage fraud, Mortgage Fraud Strike Force

State attorney general shuts down law firms accused of conning homeowners

The state Attorney General’s Office has shut down four Southern California law firms that allegedly conned about 2,500 California homeowners facing foreclosure into paying thousands of dollars to join a lawsuit against lenders that went nowhere.

The law firms made false promises to the plaintiffs to entice them to sue the lenders, telling them that foreclosure proceedings would be stopped and their monthly payments reduced, Attorney General Kamala Harris said Thursday at a news conference.

The attorney general is suing the law firms of Philip Kramer, Christopher Van Son, Paul W. Petersen and Mitchell Stein, which also has an office in Walnut Creek.

“It will bring justice to a number of homeowners of California who were targeted by predators,” Harris said. The suit, which seeks civil penalties, alleges false advertising and violations of the business and professions code.

The State Bar Association has taken over the practices of the law firms. Since 2009, 20 attorneys in California have either been disbarred or given up their license after they got in trouble from loan-modification rescue scams.

Harris alleges that the Southern California attorneys banded together to file “mass joinder” lawsuits, which effectively folded cases with separate but similar circumstances into one legal filing.

The law firms sent out mailers to homeowners in California and 16 other states who had trouble paying their mortgage.

The mailers gave the impression that a legal settlement was within reach and that the homeowners would benefit by becoming a named plaintiff.

Telemarketers gave homeowners misleading advice and information about the benefit of joining the case, according to Harris’ suit. Call center companies were also named in the suit.

Unlike conventional civil cases, which typically work on a contingency fee basis, the homeowners were required to pay from $4,000 to $10,000 to be added as a plaintiff. To date, about 2,500 homeowners, all from California, have been identified as victims, said Harris.

“They are really homeowners who have been victimized a second time,” she said.

Representatives of the Van Son, Kramer, and Petersen law firms could not be reached for comment. A man named Toby, who declined to give his last name and identified himself as a senior paralegal for Mitchell Stein, said the law firm had an active case in Los Angeles Superior Court.

“It’s not as simple as Kamala Harris filing suit,” he said.

No disciplinary charges have been filed against the attorneys by the Bar Association.

The attorney general’s lawsuit does not indicate whether the cases filed by the four law firms have any legal merit. To that end, the Bar Association will look at the circumstances of each case to see whether they should be referred to other lawyers. Clients can call the Bar Association at 213-765-1672 for more information.

A state law makes it illegal to ask for an upfront payment for loan-modification services. The law applies to real estate licensees and attorneys.

“Be wary of any person or company that asks for a fee in advance,” said Ophelia Basgal, regional counsel for the U.S. Department of Housing and Urban Development,

She reminded consumers that HUD-approved counseling agencies provide free help to homeowners facing foreclosure. Call 888-995-HOPE (4673) for more information.

By Eve Mitchell
Contra Costa Times

Tags: foreclosure help, housing fraud, how to avoid housing fraud, loan modification fraud, mortgage fraud

Tips to Avoid Loan Modification Scams

Loan modification can work in the right circumstances, but unfortunately, numerous scams have taken hold to trap unwary and desperate San Diego homeowners. Examples of scams include lease back or purchase arrangement where the homeowner is asked to sign over their deed to a third party “investor” to fake government modification programs.

Here are some tips from a Foreclosure Prevention Task Force:

1. Contact your lender or mortgage servicer first.

2. Make all payments directly to your lender or servicer. Do not trust anyone to make the payment for you.

3. If you need help, contract a reputable non-profit housing or financial counselor, such as HUD or the Homeowner Preservation Foundation.

4. Know what you are signing and get legal advice before signing documents you don’t understand.

5. Get everything in writing.

6. Report suspicious activity.

Looking for news on the latest scams and frauds? http://www.californiarealestatefraudreport.com/

Tags: loan modification, loan modification fraud, loan modification scams, loan modification tips