Attorney General Martha Coakley Obtains Temporary Restraining Order Against Company for Deceptively Advertising Foreclosure Relief Services and Soliciting Illegal Advance Fees
BOSTON – Attorney General Martha Coakley’s Office has obtained a temporary restraining order against Express Modifications, Inc., d/b/a “Loan Mods By Lawyers, Inc.,” which ran prominent advertisements in a local newspaper last month offering to help homeowners avoid foreclosure. In a complaint filed in Suffolk Superior Court today, the Attorney General’s Office alleges that the advertisements were unfair and deceptive, in violation of the Massachusetts Consumer Protection Act, because they falsely give the impression that Express Modifications would provide the homeowner with the services of an attorney, and would guarantee a loan modification that would improve the homeowner’s financial situation dramatically and save the home from foreclosure. The temporary restraining order prohibits the New York company and its employees from contacting Massachusetts homeowners to offer foreclosure-related services, taking any advance fees for its services, and publishing any false, deceptive, or misleading advertisements concerning its ability to offer loan modifications for homeowners.
“It is troubling that unscrupulous businesses are preying upon Massachusetts residents whose homes are vulnerable to foreclosure,” said Attorney General Coakley. “Given the current economic crisis, homeowners facing foreclosure already face an uphill battle to save their homes. We will not allow them to be further victimized by unlawful business practices that seek to take their money based on false promises that, in the end, provide no meaningful relief, leaving homeowners still on the verge of foreclosure.”
The advertisements in question ran on three dates in February 2009 in the Boston Metro newspaper. The company offered to assist homeowners to “Save Your Home, Modify Your Loan,” and “Stop Foreclosure; Call NOW!” and directed homeowners to the website LoanModsByLawyers.com. The Attorney General’s investigation of the company and its operations also revealed that the company demands a $1,500 up-front fee before providing services to help homeowners avoid foreclosure. Such advance fees are illegal under regulations issued by the Attorney General’s Office in 2007 to combat various unfair business practices that target homeowners facing foreclosure. The Attorney General’s Office also determined that although the company used the name “Loan Mods By Lawyers,” there appeared to be no licensed attorneys on staff.
The management of the Boston Metro newspaper was cooperative with the Attorney General’s Office in this investigation.
The Attorney General’s Office encourages homeowners having difficulty paying their mortgages on time because of rising interest rates to speak directly with their lenders or servicers about the prospects of obtaining a loan modification to an affordable payment. Homeowners can also seek free assistance from organizations in their community that are experienced in advocating on behalf of borrowers. Attorney General Coakley has repeatedly advocated that lenders consider loss mitigation measures such as loan modifications as an alternative to foreclosure which benefits both the borrower and the lender.
For more information about foreclosure prevention efforts in the Commonwealth and available counseling resources, homeowners can visit www.mass.gov/foreclosure.
Under the order issued on Wednesday by Superior Court Judge Nancy Staffier Holtz, Express Modifications and its owner, David Gotterup, must appear at a hearing on April 8, 2009, regarding the Attorney General’s request for a preliminary injunction. As part of this lawsuit, the Attorney General’s Office is also seeking a permanent injunction against the company and its owner, restitution for consumers, civil penalties, and the costs of investigation and attorney’s fees.
Assistant Attorneys General David Monahan and Emily Armstrong of Attorney General Coakley’s Consumer Protection Division are handling this matter, with assistance from Investigator Dean Bates.
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hi, i received my new loan modification from countrywide home loans. i am being offered worse terms than before i asked for help. i along with thousands of others were told back in oct. i wan’t far enough behind (3 weeks) i needed to be at least three months behind needless to say i was put off until now,told not to pay a there was a freeze on my account and they would be in touch it was until dec. that i waited and then sent new financial info hope for homeowners would help me i was told 6 weeks ago i was askked for more financial again i did it and they never received the fax lucky i called to chedk and resent the info now i got a new loan offer that will kill me in the end i cant catch up now and i cant agree to there terms it is 60 dollars lessw than it was with an ajustable rate payment shock payments to come they warn me please i dont know where to turn this is a scam hope for homeowners is rea lly HELL FOR HOMEOWNERS. i am in total despair as iam a widow and trying to do the right thing and working two full time jobs around the clock please answer me with some help frances carvalho 32 lantern lane #6 dracut mass 9784599563 or cell 9789730284
The best way to get a loan modification is to work directly with your lender. It requires a lot of follow up and documentation, but it can be done. Some lenders are better than others at working with homeowners. In many cases it may make sense to work with a professional, but be sure that the professional that you are working with is legit and that you can get all guarantees or work in writing. I have written a guide to help people with deal with their lender and negotiate a successful loan modification. It includes all the steps you need to take and what you should say.