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Mortgage Meltdown: “Entire Industry Is A Scam,” Says NY AG As Subpoenas Go Out To 14 Loan Modification Firms; “Intent To Sue” Sent To Another

June 11, 2009

Bloomberg News reports:

  • New York Attorney General Andrew Cuomo subpoenaed 14 loan-modification companies and plans to sue [another] as part of a probe of the “foreclosure rescue” industry.(1) [...] “Many of these companies charge upfront fees which are specifically prohibited by law,” Cuomo said in a conference call. “Sometimes homeowners even end up paying a higher cost after one of these companies gets involved.” Cuomo said that in many ways the “entire industry is a scam” because the U.S. Department of Housing and Urban Development provides assistance to struggling homeowners for free.

For the story, see Cuomo Subpoenas 14 Loan Modifiers, Plans Lawsuit.

See also: New York AG press release, see Cuomo Announces Intent To Sue ‘Amerimod’ Loan Modification Company In Investigation Of Foreclosure Rescue Scams Targeting Homeowners Nationwide (Long Island-Based American Modification Agency Charged Illegal Up-Front Fees and Used Deceptive Marketing to Target Homeowners Facing Foreclosure; Cuomo Also Issues Subpoenas to Fourteen Other Loan Modification Companies Across the Country in Nationwide Investigation).

(1) According to the NY AG’s office, it has served a notice of intent to sue on American Modification Agency, Inc. (“Amerimod”) and its owner and President Salvatore Pane, Jr., accusing the company of charging illegal upfront fees and using false advertising to reel in struggling homeowners. Amerimod is headquartered in Uniondale, NY and claims to operate in all 50 states, servicing thousands of consumers nationwide.

Cuomo has also issued subpoenas to fourteen loan modification companies: American Home Recovery Corporation; CloseMore Financial Corporation; 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, P.C.; Loan Modification Affiliate Exchange, Ltd, a/k/a LoanMAE; Nationwide Modification Agency, Inc.; NMA Legal Services, P.C.; 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.

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