At the end of last month, the Attorney General announced that a court had reached a decision in an alleged predatory foreclosure company that had been conducting business in Massachusetts. The announcement stated that a legal and financial services company was ordered by a judge to pay in excess of $1.9 million to the Commonwealth as a penalty for its purported role in taking advantage of consumers and engaging in the unauthorized practice of law in relation to the massive foreclosure epidemic. The company is also prohibited from soliciting any further business or marketing within the state.
The Attorney General released a statement regarding the case and stating that her office will work against potentially predatory loan modification and foreclosure scams that take place within the state.
The lawsuit reportedly alleged that the defendants misrepresented to consumers the nature of the services they could provide, exaggerated the potential benefits, charged advance fees unlawfully, conducted the unauthorized practice of law, and in some cases purportedly failed to take any of the promised actions even after having received payment. It also alleged that the defendants refused to provide the refunds they promised in the event that they were requested.
The judgment stated that the defendants reportedly obtained in excess of $1 million from more than 600 individuals in Massachusetts. As a result of the defendants’ alleged actions, the consumers not only lost money in terms of the fees paid out, but also therefore fell further behind in their mortgages, and as a result lost their homes to foreclosure, became involved in bankruptcy proceedings, and suffered other adverse consequences.
Under the final judgment, the defendants are required to pay the Commonwealth $1.9 million, which is allocated as $1.2 million in restitution for affected consumers and $665,000 in civil penalties.
In 2007, the Attorney General’s office issued regulations that among other specifics, prohibited the act of soliciting or accepting fees in advance of foreclosure related services, or advertising without stating precise courses of action to avoid foreclosure. Thus, Massachusetts law effectively prohibits the collection of advance fees for foreclosure related services.
If the facts as alleged are true, this is a sad example of the sorts of predatory businesses that can crop up in times when people need legal assistance the most.
The lawyers at Pulgini & Norton offer detail-oriented and client-centered representation in Boston property transactions. Our real estate lawyers draft agreements and negotiate provisions with your needs and goals in mind. We will work to overcome or prevent any foreseeable hurdles and protect your interests, while working towards a timely closing or resolution of your matter. If you are facing foreclosure, there are specific details you will need to know in order to determine how to best proceed. We represent clients in Brookline, Lowell, and Malden, among other Massachusetts communities. Contact us today by calling 781-843-2200 or contact us online for a consultation.
More Blog Posts:
Massachusetts Appeals Court Upholds Default Judgment in Real Estate Case, Massachusetts Real Estate Lawyer Blog, published April 8, 2015
Massachusetts Appeals Court Sides with Bank in Nantucket Foreclosure Case, Massachusetts Real Estate Lawyer Blog, published March 26, 2015