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NEWARK
– Continuing the State’s on-going
efforts to thwart fraudulent “mortgage
loan modification” enterprises, Attorney
General Paula T. Dow and the State Division
of Consumer Affairs filed administrative
actions against seven businesses for illegally
offering mortgage modification services
to homeowners in dire financial straits.
State law requires that anyone providing
these services in New Jersey be licensed
as a Debt Adjuster by the Department of
Banking and Insurance, or be otherwise authorized.
The
Division of Consumer Affairs filed Notices
of Violation against the illegitimate businesses,
which offered mortgage loan modification
services even though they were not licensed
to do so in New Jersey. The State is seeking
$35,000 in civil penalties and $49,434 in
consumer restitution from the companies.
The amounts sought in consumer restitution
represent the fees paid by approximately
10 consumers for mortgage loan modification
services.
The
Notices of Violation also provide that the
companies, cited for violating the state’s
Consumer Fraud Act and Debt Adjustment and
Credit Counseling Act, must cease and desist
from offering debt adjustment services.
The companies have the option of contesting
the Notice of Violation and requesting a
hearing.
“We
do not want homeowners who are already struggling
to make mortgage payments victimized by
unlicensed persons offering services that
they cannot lawfully provide,” Attorney
General Dow said. “Unlicensed companies
most often make a difficult situation worse
for homeowners, and we will continue to
go after these firms.”
Thomas
R. Calcagni, Director of the State Division
of Consumer Affairs, said that the violations
were filed as part of the Division’s
ongoing initiative to crack down on mortgage
modification businesses operating outside
the law.
“Since
the Division began this initiative earlier
this year, we have taken action against
18 unlawful mortgage modification outfits,”
said Calcagni. “So long as illegal
mortgage modification businesses continue
to ignore our laws and take advantage of
financially-strapped New Jersey homeowners,
we will continue to hold those businesses
and their principals accountable. Our aggressive
enforcement of these illegal enterprises
continues.”
Calcagni
noted that the Division of Consumer Affairs
created its Financial Fraud Unit, within
its newly reorganized Office of Consumer
Protection, specifically to focus on mortgage-related
frauds that prey on the hopes and fears
of homeowners struggling amid financial
hardship, and desperate to keep their homes.
In March 2011, the Financial Fraud Unit
filed Notices of Violation against 11 fraudulent
mortgage loan modification providers, seeking
a total of $126,000 in consumer restitution
and $55,000 in civil penalties (see the
March 9 press release, www.NJConsumerAffairs.gov/press/ncpw_mortgage.htm).
In
the past year, the Division has recovered
more than $2.2 million in actual restitution
dollars for desperate New Jersey homeowners
who had been victimized by predatory mortgage
practices and mortgage-related scams.
The
seven companies served with a Notice of
Violation are:
- Dunwell
Financial Services, LLC - Jersey City
- Home
Mitigation Group - Matawan
- Loss
Mitigation Consultant Services - Paulsboro
- Rose
MM, LLC - Newark
- Save
Americas Mortgages Corp. - Fort Lee
- TWI
Corp. - Winter Garden, Fla.
- Continental
Associates, Ltd. - Commack, N.Y.
A
mortgage loan modification involves changing
the terms of an existing loan – for
example, by lowering the monthly payments,
adjusting the interest rate, extending the
length of the loan, or in some cases decreasing
the unpaid balance.
The
only types of business that can engage in
mortgage loan modification services in New
Jersey are:
- Nonprofit
organizations licensed as Debt Adjusters
by the State Department of Banking and
Insurance;
- The
lender or owner of the loan;
- The
mortgage servicer acting on the lender
or owner's behalf; or
- An
attorney, provided he or she is not primarily
engaged in debt adjustment.
The
Department of Banking and Insurance provides
a complete listing of all licensed Debt
Adjusters in New Jersey at www.state.nj.us/dobi/division_consumers/finance/counselors.html
To
help consumers learn about more about avoiding
mortgage-related scams, and how to obtain
genuine assistance, the Division of Consumer
Affairs has written a consumer brief that
can be viewed at www.NJConsumerAffairs.gov/brief/mortgage.pdf
.
Investigator
Kevin Noland, of the Mortgage/Financial
Fraud Unit within the Division’s Office
of Consumer Protection conducted the investigations
of these companies. Deputy Attorney General
Lorraine K. Rak, Chief of the Consumer Fraud
Prosecution Section, provided legal counsel.
Consumers
who believe they have been cheated or scammed
by a business, or suspect any other form
of consumer abuse, can file a complaint
with the State Division of Consumer Affairs
by visiting its website, www.NJConsumerAffairs.gov,
or by calling 1-800-242-5846
(toll free within New Jersey) or 973-504-6200.
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