Loan modifications and mortgage refinancing are the hot subject of the moment in the financial world. This is no surprise when there are around 5 million homeowners facing foreclosure with or without the government’s aid and 9 million without it. This “need” has opened a practically brand new market for financial consultants looking for a niche to work in. In a matter of months a new industry was born providing help and advice to save our homes and consolidate our debts while reducing our monthly payments.
Unfortunately some companies and individuals have taken advantage of this new industry to target desperate home owners that in their need to lower their monthly expenses are vulnerable to scams.
The government is trying its best to reduce the increase in foreclosures. That is a good thing because according to the Center for Responsible Living a new foreclosure is filed every 13 seconds. Of course the government doesn’t appreciate it when private companies and consultants pull down the modest advances they are making by duping home owners into fraudulent contracts and outright scams.
The latest and most scandalous case occurred yesterday when Attorney General Andrew M. Cuomo announced that his office had filed a lawsuit against American Modification Agency, Inc. (Amerimod) one the biggest foreclosure rescue companies in the country, and its owner Salvatore Pane, Jr.
The lawsuit accuses Amerimod and its owner of deception, false advertising and deception of homeowners in risk of foreclosure. The investigation into Amerimod disclosed that while the company claimed to modify the mortgages of desperate homeowners close to foreclosure did not only fail to fulfill its promises but actually added to their financial woes by throwing them deeper into debt. Amerimod would routinely charge up-front fees for services they had not carried out. They exaggerated their loan modification success rate and underestimated the time required to modify the loan.
The lawsuit also accuses Amerimod of failing to include the legally required disclosures in the customer contracts. What is even worse is that the company regularly provided terrible financial advice to its customers, like suggesting they stop making mortgage payments to their lender. They would also target Spanish speakers with Spanish speaking salespeople but once it came to contract signing they would not provide Spanish contracts.
The lawsuit hopes to close down the loan modification company and compensate Amerimod customers that were charged illegal up-front fees and fell for their hollow promises.
Last 3 posts by Andrew
- Loan Modification Tips: How to Choose the Better Loan? - April 29th, 2010
- Top 5 Loan Modification Tips to Avoid Foreclosure - April 24th, 2010
- Banker's Choose not to Swallow Obama's Loan Modification Bitter Pill - April 18th, 2010
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