NEWARK
– The State Division of Consumer Affairs
has issued Notices of Violation to three
companies and their operators who took payments
from consumers for mortgage modification
services without being licensed by the State
as legally required.
None
of the 270 consumers who have filed complaints
to date were able to get their mortgages
modified. The consumers collectively paid
$398,059 to the three companies.
The
Division of Consumer Affairs issued Notices
of Violation to the following, with the
number of consumer complaints received
and the amount of restitution owed to
consumers as noted:
The
Notices of Violation state that each of
the named parties violated the State’s
Consumer Fraud Act by committing unconscionable
business practices through not being licensed
as debt adjusters by the State Department
of Banking and Insurance.
“The
law is clear – debt adjusters must
be licensed by the State Department of
Banking and Insurance,” Attorney
General Jeffrey S. Chiesa said. “We
allege that these parties broke the law.
We’ve taken action to hold each
accountable and to get money returned
to the consumers who were deceived.”
In
addition to restitution, each of the three
companies must pay a $5,000 civil penalty
to the State and cease from advertising,
offering to sell, and selling debt adjustment
services.
Each
has the option to accept the settlement
terms outlined in the Notice of Violation
or contest the Notice at an administrative
hearing with the State Division of Consumer
Affairs.
“Homeowners
working to keep their residences are often
put into a worse situation by unlicensed
companies offering mortgage modification
assistance,” said Thomas R. Calcagni,
Director of the Division of Consumer Affairs.
“In this difficult financial climate,
with so much at stake for struggling homeowners,
our Financial Fraud Section has substantially
intensified its enforcement efforts against
these often fly-by-night mortgage modification
outfits – shutting them down whenever
possible.”
Investigators
with the Financial Fraud Section within
the Division’s Office of Consumer
Protection conducted the investigations
that resulted in the Notices of Violation.
In all, the Division of Consumer Affairs
has charged nearly 70 companies that allegedly
offered mortgage modification services
to consumers without being licensed to
do so.
In
February, the Office of the Attorney General
and the Division of Consumer Affairs won
a $469,500 trial decision against two
corporate defendants and two individuals
accused in a lawsuit of defrauding financially
struggling homeowners through a variety
of deceptive mortgage foreclosure “rescue”
practices.
