For the last year I have been blogging about a large East Coat loan modification firm called American Modification Agency (AKA Amerimod or Your AMA) and its owner, Sal Pane. Just last month, New York Attorney General Andrew Cuomo filed civil charges the Long Island loan modification company.
Cuomo at that time described his investigation into the loan modification industry “has already uncovered many troubling practices.”
Now it looks like his investigations may lead to civil and possible criminal charges for the Long Island firm and the owner. Below is a press release just announced by the NY Attorney General.
From the New York Attorney General:
CUOMO ANNOUNCES LAWSUIT AGAINST “AMERIMOD” LOAN MODIFICATION COMPANY TO PROTECT DISTRESSED HOMEOWNERS FACING FORECLOSURE
Long Island-Based Company Charged Illegal Up-Front Fees and Failed To Obtain Promised Help for Homeowners
Suit Seeks Refunds for Thousands of Customers and Court Order Shutting Down Company
NEW YORK, NY (August 13, 2008) – Attorney General Andrew M. Cuomo today announced that his office has filed a lawsuit against New York-based American Modification Agency, Inc. (“Amerimod”), one of the largest foreclosure rescue companies in the country, and its owner Salvatore Pane, Jr. for engaging in a wide variety of deceptive business practices and false advertising to induce beleaguered homeowners on the brink of foreclosure to sign up for their services. Today’s lawsuit is part of Cuomo’s ongoing investigation into foreclosure rescue scams that target New York homeowners.
Attorney General Cuomo’s investigation into Amerimod revealed that while claiming to modify home mortgage loans and lower monthly payments of consumers on the brink of foreclosure, Amerimod typically falls short on its promises. In fact, after Amerimod collects illegal, up-front fees, the homeowners often find themselves in worsened circumstances with respect to their mortgages and unable to obtain accurate information from Amerimod’s representatives or other customer service. The lawsuit seeks refunds and damages for Amerimod’s customers who were charged illegal up-front fees and were deceived by the company’s empty promises, misleading representations, and false advertising. It also seeks to shut down the company’s New York operations.
“Amerimod shamelessly took advantage of thousands of vulnerable homeowners desperately trying to save their homes,” said Attorney General Cuomo. “By charging up-front fees and making misleading and deceptive claims about its ability to prevent foreclosure, Amerimod blatantly ignored the law and tried to squeeze the last dollars from struggling consumers nationwide. My office is determined to obtain relief for these individuals and families, and to prevent Amerimod and other foreclosure rescue companies from continuing to engage in this kind of unlawful conduct.”
The lawsuit asserts that Amerimod:
- Fails to obtain loan modifications for the vast majority of its customers, many of whom end up in foreclosure or negotiate loan modifications on their own.
- Illegally charges thousands of dollars in up-front fees, and fails to refund these fees as promised when loan modifications are not obtained.
- Engages in deceptive and misleading practices by grossly exaggerating its success rate, making false promises about its ability to save customers’ homes, underestimating the amount of time it takes to achieve a loan modification, and misrepresenting that the company is a law office and that lawyers will work on customers’ files.
- Makes false guarantees of 100% customer service when, in fact, once Amerimod has collected its up-front fees, its representatives often fail to return calls of customers facing imminent foreclosure who are desperately seeking a status update on their files.
- Makes false and misleading statements on its website, in newspaper advertisements, and in radio advertisements.
- Fails to include legally required disclosures and notices in its customer contracts, including notice of a customer’s right to cancel a contract within five business days.
- Provides detrimental advice to customers, such as recommending that they stop making monthly mortgage payments, ignore communications from their lenders and avoid consulting with non-profit housing counseling agencies.
- Targets Spanish-speaking consumers who are signed up by Spanish-speaking representatives, and then fails to provide the consumers Spanish-language contracts as required by law.
Amerimod’s central office is in Uniondale, NY, and it has had more than ten branch offices throughout the state, as well as offices in various states throughout the United States. The lawsuit seeks a court order directing Amerimod to stop marketing and providing loan modification services in New York State, provide an accounting of customer fees, pay refunds and damages to all injured customers, and pay monetary penalties to the State.
The lawsuit against Amerimod is part of Cuomo’s wide-ranging investigation into the so-called “foreclosure rescue” industry. To date, Cuomo’s office has issued subpoenas to 18 other loan modification companies that have targeted New York homeowners facing the risk of losing their homes.
For more tips, see the Attorney General’s brochure, “Avoid Foreclosure and Rescue Scams”: http://www.oag.state.ny.us/features/foreclosure_rescue_scams/brochure_download.html.
The lawsuit against Amerimod is being handled by Special Counsel Mary Alestra, Assistant Attorneys General Brian Montgomery, Laura Levine, and Stephanie Sheehan, and Senior Enforcement Counsel David Holgado of the Bureau of Consumer Frauds & Protection under the supervision of Bureau Chief Joy Feigenbaum.
From the NY AG: http://www.oag.state.ny.us/media_center/2009/aug/aug13b_09.html
Other links of intrerest: