Mass AG Files Civil Charges Against Loan Modification Firm; Alleges Collection Of Illegal Upfront Fees, Violations Of State Consumer Protection Act

From the Office of the Massachusetts Attorney General:

• Attorney General Martha Coakley’s Office has obtained a temporary restraining order against Express Modifications, Inc., d/b/a “Loan Mods By Lawyers, Inc.,” which ran prominent advertisements in a local newspaper last month offering to help homeowners avoid foreclosure. In a complaint filed in Suffolk Superior Court [Wednesday], the Attorney General’s Office alleges that the advertisements were unfair and deceptive, in violation of the Massachusetts Consumer Protection Act, because they falsely give the impression that Express Modifications would provide the homeowner with the services of an attorney, and would guarantee a loan modification that would improve the homeowner’s financial situation dramatically and save the home from foreclosure.(1)

For the entire press release, see Attorney General Martha Coakley Obtains Temporary Restraining Order Against Company for Deceptively Advertising Foreclosure Relief Services and Soliciting Illegal Advance Fees.

(1) According to the Massachusetts AG, the advertisements in question ran on three dates in February 2009 in the Boston Metro newspaper. The company offered to assist homeowners to “Save Your Home, Modify Your Loan,” and “Stop Foreclosure; Call NOW!” and directed homeowners to the website LoanModsByLawyers.com. The Attorney General’s investigation of the company and its operations also revealed that the company demands a $1,500 up-front fee before providing services to help homeowners avoid foreclosure. Such advance fees are illegal under regulations issued by the Attorney General’s Office in 2007 to combat various unfair business practices that target homeowners facing foreclosure. The Attorney General’s Office also determined that although the company used the name “Loan Mods By Lawyers,” there appeared to be no licensed attorneys on staff.