Michigan AG Files Criminal Charges Against Loan Modification Firms As Part Of "Operation Loan Lies"

Unlike most of the other participants in the the joint Federal/state law enforcement effort to eliminate loan modification scams who have brought civil lawsuits or initiated administrative proceedings (and issued cease and desist orders), the Office of the Michigan Attorney General has taken a different route by bringing criminal charges against the alleged scammers.(1) According to the Michigan AG's office:

• Attorney General Mike Cox [...] announced that his office has filed 18 charges against four companies and one individual for committing foreclosure rescue fraud.(2) Cox also issued warnings to 17 companies regarding complaints from residents about their practices.(3) Michigan law prohibits "foreclosure rescue" companies, which provide foreclosure advice, from making misleading or false statements, or charging service fees before any service is completed.

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• The charges resulted from the Attorney General's office conducting undercover operations based on complaints from homeowners and include one count of unauthorized use of the Great Seal of the State of Michigan and 17 counts of violating Michigan's Credit Services Act (CSA). The CSA prohibits charging fees before completing services when seeking to negotiate a loan on behalf of a homeowner. The Credit Services Act carries a maximum penalty of 90 days in jail and/or $1,000 fine, and allows the Attorney General's office to seek restitution for affected consumers.

For the Michigan AG press release, see Cox Charges Five for Foreclosure Rescue Fraud.

Go here for a summary of the Federal and state actions by those participating agencies in "Operation Loan Lies."

(1) The U.S. Attorney's Office in Los Angeles is the only other government agency bringing criminal charges in the "Operation Loan Lies" effort (U.S. v. Gilfert Jackson, Case No. 2:09-cr-00538-SVW (C.D. Cal.); U.S. v. Jeff McGrue, Gerald Guidry; Case No. 2:08-cr-01318-ODW (C.D. Cal.)).

(2) Those charged include:

• Save My Home USA of Madison Heights (Charged victims between $595 and $2,000 before completion of services and advised consumers not to communicate with their mortgage company),
• Help4homeowners of Birmingham (Falsely claimed a 97% success rate, charged before completion of services, and its employee admitted they had no loan training),
• Payment Doctors of Livonia (Made false claims and charged before completion of services),
• Michigan Economic Reinstatement Program (MERP) of Livonia and owner Mark Alan Aloe of Farmington Hills (Charged victims between $360 and $3,000 before completion of services, made false claims, and used business cards with state seal but did not work for the State of Michigan. Aloe faces 90 days in jail and/or a $1,000 fine).

(3) Attorney General Cox has requested more information from the following 17 companies about their business activities:

• AFS Loan Modification Corp, Redondo Beach, CA; Apply 2 Save, Inc./Apply2Save, Coeur D'Alene, ID; Elect Group LLC, Deerfield Beach, FL; Equity Recovery Services, Towsen, MD; Federal Home Savers, Comniack, NY; Financial Solution Center, Corona, CA; Fresh Start Home Modification, Woodbury Heights, NJ; Fresh Start Program/Fresh Start Mortgage Assistance, Fresh Start Mortgage Solutions, Mortgage Assistance Solutions, Clearwater, FL; Hope Now Modifications, LLC, Cherry Hill Twp., NJ; IMC Financial, Clearwater, FL; Kirkland Young LLC, Miami Beach, FL; National Home Loan Assistance Program, San Diego, CA; New Hope Loan Modification, Bellmawr, NJ;. Oceanview Investments, Oceanview Investment Services Corp., Fort Lauderdale, FL; Peoples First Financial, San Diego, CA; Pope & Associates Mortgage, Ontario, CA; Savemtg.com, Galthersburg, MD.