Arizona AG Obtains $580K Default Judgment Against Alleged Loan Modification Racket For Fleecing Homeowners Out Of Upfront Fees, Breaking Promises

In a recent press release, the Office of the Arizona Attorney General announced the obtaining of a default judgment in a civil lawsuit it brought against a local foreclosure rescue operator who peddled loan modification arrangements to homeowners facing foreclosure, purportedly to help them avoid the loss of their homes.(1)

• In the suit, [Attorney General Terry] Goddard alleged that [...] Matthew Castaneda, of Glendale, and Michael Winding, of Phoenix, through their limited liability company Hope for Homeowners Now, LLC, victimized homeowners facing imminent foreclosure with fraudulent claims of high success rates modifying mortgage loans. Hope for Homeowners Now advertised loan modification services for an upfront fee of $3,195.

Based on the Attorney General’s investigation, Goddard alleged that Hope for violated numerous state laws by:

• Deceptively implying it was more successful at obtaining mortgage loan modifications than consumers who try to obtain modifications on their own or with the assistance of non-profit organizations. In fact, the company’s success rate was no better than that of its clients who tried to obtain loan modifications on their own,

• Misrepresenting that the company was comprised of real estate and financial professionals, as well as “professional mitigation attorneys,” and that attorneys negotiate on behalf of Hope for Homeowners’ clients,

• Charging consumers an upfront fee prior to the full performance of services and without first having obtained a surety bond,

• Failing to provide its loan modification clients with the necessary substantive disclosures required by the Arizona Credit Services Act.(2)

For the press release, see Goddard Wins $1.37 Million for Consumers in Two Mortgage Fraud Cases.

For the related court documents in this case, see:

• Default Judgment - State of Arizona v. Hope For Homeowners Now, LLC, et al.,
• Lawsuit - State of Arizona v. Hope For Homeowners Now, LLC, et al.

(1) According to the court judgment, the defendants must:

• Pay $424,935 in restitution to consumers,
• Pay $155,000 in civil penalties to the State of Arizona,
• Permanently refrain from providing loan modification or origination services in Arizona or on behalf of an Arizona consumer.

(2) Title 44: Sections 44-1701 through 44-1712, Arizona Revised Statutes.