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10/18/10

California Attorney General Brings Scamming Companies to Court


According to The Sacramento Bee, two companies and the attorneys who helped them are being sued for $60 million by the State of California. The companies, both located in Rancho Cordova, are charged with defrauding homeowners and causing many to lose their homes. These companies charged homeowners upfront fees for a "forensic loan audit" which they said could reveal fault on the part of the lenders and would lead to a loan modification. Charging as much as $6,000 per audit, hundreds of homeowners were pushed father into debt and even into foreclosure. Homeowners should know that even if a mistake is found in their mortgage paperwork, this is not grounds for a lender to re-negotiate the terms of the loan.

According to The Sacramento Bee, two companies and the attorneys who helped them are being sued for $60 million by the state of California. US Loan Auditors and My US Legal Services both located in Rancho Cordova, are charged with defrauding homeowners and causing many to lose their homes. These companies charged homeowners upfront fees for a "forensic loan audit" which they said could reveal fault on the part of the lenders and would lead to a loan modification. Charging as much as $6,000 per audit, hundreds of homeowners were pushed father into debt and even into foreclosure. Homeowners should know that even if a mistake is found in their mortgage paperwork, this is not grounds for a lender to re-negotiate the terms of the loan.

However, US Loan Auditors and My US Legal Services demanded even more money from homeowners in order to sue mortgage lenders in court. The companies even went as far as to tell homeowners to stop mortgage payments to their lenders, collecting the money themselves. The owners of the companies, James Sandison, Jeffrey Pulvino and Shane Barker are also named individually in the lawsuit. My US Legal Services is dealing with another lawsuit in the U.S. District Court. Bank of America has brought suit against the company for allegedly scamming their customers with no intention of negotiating modifications on their loans held by the bank.

The two lawyers who are also named in the lawsuit, Jonathan G. Stein of Elk Grove and Sharon L. Lapin of Greenbrae, filed the lawsuits on behalf of the companies. However, the suit filed by Attorney General Brown claims the paperwork submitted in these lawsuits was actually prepared by non-lawyers employed by the companies. Stein and Greenbrae received a monthly fee for every lawsuit they filed for the companies.

Pam Canada, the Executive Director of the Sacramento branch of NeighborWorks, reports her dealings with the two companies facing charges, "I'm not aware of any person who has been successful with them." California, a state that has been especially hard hit by the foreclosure crisis, is plagued by companies that offer a guaranteed stop to foreclosure, but only for a fee. However, many of these companies offer little relief to distressed homeowners. The Loan Modification Scam Prevention Network reminds homeowners to be wary of companies asking for an upfront fee. Please click here to view a list of HUD approved counseling agencies in your area that can provide help for free.

For more information, please read The Sacramento Bee article, "California Officials Sue Two Rancho Cordova firms in Alleged Mortgage Scam"