New York Sues Foreclosure Rescue Companies

Posted on June 11, 2009. Filed under: Fraud, Loan Modification, Mortgage Fraud, Mortgage Law | Tags: , , , , |

New York Attorney General Andrew M. Cuomo is suing his state’s largest foreclosure rescue company and begun investigations of 14 others that do business in the U.S., ratcheting up the legal pressure on firms that exploit consumers in danger of losing their homes.

Cuomo’s office has served a notice of intent to sue on American Modification Agency, Inc. and its owner and President Salvatore Pane, Jr., claiming the company targets homeowners facing foreclosure by claiming that it can save their homes, but often fails to provide the services promised. Cuomo says the company charges illegal up-front fees and engages in consumer fraud.

Amerimod is headquartered in Uniondale, NY and claims to operate in all 50 states, servicing thousands of consumers nationwide.

As part of his investigation into the so-called “foreclosure rescue” industry, Cuomo also has also served subpoenas on fourteen other companies in New York and across the country that offer loan modification services.

Capitalizing on the current economic downturn and housing crisis, Cuomo says these companies scour foreclosure notices and filings and prey on consumers desperate to save their homes from being foreclosed. They promise they will negotiate with the consumers’ banks to lower mortgage interest rates, lock in fixed rates, get late fees and past due payments forgiven, and even reduce principal balances.

The investigation comes in response to complaints from homeowners that these companies fail to deliver as promised, charge illegal, up-front fees and use misleading advertising to lure consumers into services that oftentimes leave them further in debt, facing a worsened threat of foreclosure.


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