California AG Scores $1.1M Judgment Against Attorney In Alleged Foreclosure Rescue Racket That Screwed 2,000 Desperate Homeowners Out Of Thousand$

From the Office of the California Attorney General:

• Attorney General Edmund G. Brown Jr. [] announced a $1.1 million judgment against longtime Los Angeles attorney Mitchell Roth after he conned 2,000 desperate homeowners into paying him thousands of dollars to file "frivolous and phony" lawsuits that didn't reduce a penny of mortgage debt for a single client.(1)

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• In 2008, Roth, a seasoned Los Angeles attorney, joined with Nevada-based United First, Inc. and the company's owner, Paul Noe, to provide foreclosure relief services to homeowners struggling to pay their mortgages.(2)

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• United First charged homeowners some $1,800 in up-front fees, plus at least $1,250 each month, and 50 percent of the cash value of any settlement. If a homeowner's debt was eliminated altogether, the homeowner was required to pay United First 80 percent of the value of the home.

• After collecting up-front fees, Roth filed lawsuits on behalf of homeowners, pushing a novel legal argument that a borrower's loan could be deemed invalid because the mortgages had been sold so many times on Wall Street that the lender could not demonstrate who owned it. Once the lawsuit was filed, Roth did next to nothing to advance the case and often failed to make required court filings, respond to legal motions, comply with court deadlines or appear at court hearings. Instead, Roth tried to extend the lawsuits as long as possible to collect additional monthly fees from clients. This approach did not generate a single victory in court and did not lower or eliminate the mortgage debt for a single one of the 2,000 homeowners who hired Roth and United First.

For the entire California AG press release, see Brown Wins $1 Million in Restitution for Victims of Attorney-Backed Foreclosure Rescue Scam.

Go here for the California AG lawsuit against Roth and here for the $1.1 million judgment against Roth.

(1) AG Brown's lawsuit contended that Roth and others:

• Violated California's credit counseling and foreclosure consultant laws, Civil Code sections 1789 and 2945;
• Inserted unconscionable terms in contracts;
• Engaged in improper running and capping, meaning that Roth improperly partnered with United First, Inc. and company owner Paul Noe, who were not lawyers, to generate business for his law firm violating Section 6150-6156 of the California Business and Professions Code, and
• Violated Section 17500 of the California Business and Professions Code.

(2) In addition to the hot water they got into in this case, Paul Noe reportedly was convicted of wire fraud in 1989 and the subject of a California Department of Insurance Cease and Desist Order in 2004; and Mitchell Roth resigned from the California State Bar in late May 2009, after the State Bar closed his law firm (see SF Weekly: State Bar Takes Over 'Son of Super Swindler' Law Firm -- 2,000 Con Jobs Too Late).