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03/10/11

NY Loan Scam Lawsuit Featured in WSJ, NY Daily News, Nat'l Mortgage News

WSJ: 

"Since February 2010, when the Lawyer's Committee began keeping track of modification fraud complaints, more than 10,000 homeowners nationwide have claimed they were victims of similar scams resulting in more than $27 million in losses. About 500 of those complaints are from New York, which the claimants said resulted in more than $2 million in losses..."

To read the full Wall Street Journal article, click here.

NY Daily News: 

"A class-action suit filed Wednesday says homeowners trying to avoid foreclosure paid illegal upfront fees to some Long Island firms that did little or nothing to lower their mortgages.

Filed on behalf of seven local plaintiffs who lost more than $21,000 to a Garden City company called Save My Home, the suit seeks restitution for hundreds of victims. Six of the plaintiffs are from poor neighborhoods in Queens and Brooklyn.

"This case exemplifies the destructive effect that the for-profit loan modification industry has had on low- and middle-income homeowners," said lawyer Eunice Rho of the Lawyers' Committee for Civil Rights Under Law, who filed the suit along with the Davis Polk & Wardwell law firm. The suit claims Save My Home violated a new law barring anyone negotiating for a mortgage reduction from charging upfront fees..."

To read the full article at NY Daily News, click here.

Nat'l Mortgage News: 

"According to the lawsuit, the scheme began when a so-called loan specialist located a homeowner through the Internet, print ads and cold calls, who were struggling to make a monthly mortgage payment and feared the possibility of foreclosure. The scammer gained the homeowner’s trust by promising to save the home and lower the monthly mortgage payments.

After agreeing to a written or oral contract with the homeowner, the “specialist” demanded an upfront payment in exchange for the promise to renegotiate the mortgage..."

To read the full National Mortgage News article, click here.

For the full press release on the case, click here