Prevent Loan Scams

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Initial Victories in New Cases Filed against Two of New York's Largest Mortgage Scammers

The Lawyers’ Committee is pleased to report on two sweeping court orders from the New York State Supreme Court that restrain the activities of alleged loan modification scammers, providing early victories for financially vulnerable homeowners. The rulings pertain to two new cases filed last week by the Lawyers’ Committee and its pro bono counsel Davis Polk & Wardwell LLP in New York: Osmanzai, et al., v. Save My Home Corp., et al., 9471-2011 and Mook, et al., v. Homesafe America, Inc., et al., 9472-2011.  

On July 5, Justice Thomas A. Adams of the Nassau County Supreme Court extended a temporary restraining order that restricts the activities and freezes the assets of a group of companies that operate under the names “Express Home Solutions” and “Home Preserve Law Group” (collectively, “EHS”) in Osmanzai v. Save My Home. The Lawyers’ Committee and Davis Polk originally filed a case against EHS entities back in March 2011, which was the first suit filed as part of the Lawyers’ Committee’s nationwide anti-scam campaign, the Loan Modification Scam Prevention Network (“LMSPN”). The media coverage that followed – including stories in The Wall Street Journal and New York Daily News – resulted in dozens of additional victims coming forward, compelling the Lawyers’ Committee to file this second lawsuit against EHS in late June to help many of these homeowners obtain legal recourse. Within days of this second filing, Justice Adams issued the restraining order to quickly shut down the alleged scam operations, vindicating the Plaintiffs’ efforts.

A similar order was issued on June 28 by Justice John M. Galasso, also of the Nassau County Supreme Court, which enjoins a group of individuals operating a separate business under the name “Homesafe America” (Homesafe) in Mook v. Homesafe. Based in Levittown, New York, Homesafe and its successor corporation, United Legal Solutions, are alleged to operate a constellation of websites advertising loan modification assistance. Court records indicate that Homesafe grossed more than $2 million in 2010 alone and, as of February 2011, is believed to have taken money from approximately 1,000 families across the country. 

The cases are seeking a combined $3 million in punitive damages against the alleged scam operations, as well as court orders permanently preventing their owners and employees from engaging in mortgage-related activities.

“The Lawyers’ Committee has now filed three cases in New York to fight these widespread fraudulent schemes, with a total of four cases pending nationwide,” said Lawyers’ Committee Chief Counsel and Senior Deputy Director Jon Greenbaum. “We are committed to fighting this scourge through lawsuits like these and through coordination with and assistance to federal, state and local law enforcement.”

Since the launch of the LMSPN database in February 2010, more than 15,000 homeowners have reported scams or potential scams, totaling over $35 million lost. Over 800 of those complaints come from New York State residents, with reported losses of over $3 million.

Click here to read the full press release on the newest New York cases.

Click here to read the Osmanzai v. Save My Home complaint.

Click here to read the Mook v. Homesafe complaint.

Click here for a detailed “anatomy” of the Homesafe scam and key documents related to the case.