'Phony lawsuits' didn't help homeowners
Eight Web sites tied to alleged foreclosure rescue scam
By Inman News, Wednesday, July 8, 2009.A foreclosure consultant and attorney are accused of filing lawsuits to forestall foreclosure proceedings on behalf of more than 2,000 homeowners in California, then abandoning or failing to prosecute hundreds of the cases.
Consultant Paul Noe Jr. and attorney Mitchell W. Roth "ripped off homeowners desperate for help by charging unconscionable fees for phony lawsuits," California Attorney General Jerry Brown said in announcing a complaint against the two. "Instead of aggressively pursuing the lawsuits, Noe and Roth strung them along so they could continue to rake in fees."
The pair abandoned or failed to prosecute hundreds of cases, neglecting to respond to motions to dismiss and other pleadings, prompting the California State Bar to shut down Roth's law firm, MW Roth PLC, in February, the complaint alleged. Roth resigned from the bar in May.
Noe's company, United First Inc., typically charged $1,850 in upfront fees and a monthly fee of at least $1,250 a month, the complaint said. Noe was convicted of wire fraud in 1989 and subjected to a cease-and-desist order by the California Department of Insurance in 2004, the complaint said.
Alleged victims were recruited through a network of sales representatives, independent contractors and at least eight Web sites, including UnitedFirstForeclosureRelief.com, StopOnForeclosure.com, BailOutMyHouse.com, TrueForeclosureRelief.com, UfirstForeclosureRelief.com, SavingOneHomeataTime.com, helpfor4close.com, and ufci.net.
The Web sites claimed consumers could pursue a "quiet title" action to "remove all debt" from their home, the complaint said. Such lawsuits -- which argue that a borrower's loan is invalid because it has been resold and the current owner cannot produce a note demonstrating ownership -- have led to dismissals of foreclosure proceedings in other states. ...CONTINUED
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Submitted by Joe Workman on July 8, 2009 - 11:05am.
Its a big shame that a few select individuals have to spoil an industry. The law that took affect on July 1st took my company out of the loan modification business. We felt that it was too expensive and the new regulations did not make it attractive any longer. We never got into the large up front fee game however. We charged a $500 processing fee up front with the remaining balance due upon completion of the loan modification. This way we got paid based on our performance and only helped people we felt could successfully obtain a loan modification. We did not prey on the consumers that had no chance of getting approved. I see that as just stealing money.
We are currently working on a loan modification Do-It-Yourself online training that we plan on offering as a free service to the public. I am very excited about this and hope that we can help thousands of more people get out from under their financial woes.
On a side note, if you were to read the new "Foreclosure Consultant" law in CA, its very interesting to see who is excluded from the new regulations. Anyone who has a license to practice law can legally do loan modifications outside of the new regulations. This is why you see so many lawyers advertising on TV for loan modifications. I find it very convenient that lawyers excluded themselves! Coincidence? I think not....
Cheers,
Joe
Submitted by John Greenman on July 8, 2009 - 1:08pm.
Ditto Joe. I am starting law school soon and cannot wait for the day when these type of practiotners can be put out of business.
The Tax Guy Worldwide
Bonita, CA