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
But the owners of those mortgages still have the right to initiate foreclosure proceedings again, and none of the cases have resulted in the cancellation of the loans, the attorney general said.
Although United First claimed it was not a foreclosure consultant, the state’s complaint said Noe and Roth were in fact subject to the Mortgage Foreclosure Consultant Act, and violated its disclosure provisions.
Many of the victims of the defendants’ scheme were Spanish-speaking, the complaint said, and while contracts were negotiated with them in Spanish, consumers were typically provided with and signed contracts printed in English.
The complaint seeks an injunction against Noe and Roth and at least $1 million in civil penalties.
The California Attorney General recommended that homeowners facing foreclosure contact housing counselors approved by the U.S. Department of Housing and Urban Development (HUD) by calling 1-800-569-4287 or visiting www.hud.gov.
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