NY AG's Recent Calling Card To Loan Modification Operators Around The Country Warns Of Personal Financial Liability For Officers Of These Outfits

In a cease and desist letter recently sent out to over 180 loan modification outfits, the Office of New York Attorney General Andrew Cuomo offered this friendly admonition to the firms, as well as to the individuals operating these rackets who mistakenly believe they can hide behind their corporate veils to shield themselves of personal financial liability for their actions:

• Recently, the New York Supreme Court issued a favorable decision in one case filed by this Office, finding that one of the largest foreclosure rescue companies and its president had violated Section 265-b as well as General Business Law §§ 349 and 350.

• Specifically, the Court found that the company violated Section 265-b by charging illegal, upfront fees for its loan modification services, failing to provide contracts in the language of its customers, especially Spanish, and failing to provide homeowners with the legally required notice of their right to cancel within five business days. The Court also ruled that the company made numerous false claims in its advertisements, including misrepresenting the number of homes it had saved, falsely claiming to have a 90% to 100% success rate, falsely claiming to be "licensed" by a government agency, and falsely claiming that it was affiliated with "legal experts."

• The decision holds the company's president personally liable for engaging in fraudulent and illegal acts, and permanently prohibits the respondents from engaging in the illegal, fraudulent and deceptive business practices and false advertising described in OAG's lawsuit.

• I encourage you to review your company’s practices and, where applicable, to cease and desist engaging in any unlawful, fraudulent, or deceptive practices. If you have any questions, please do not hesitate to contact our office at 212-416-8300 or 212-416-8250.

Go here for the NY AG's cease and desist letter.