Minnesota AG Files Unrelated Suits Charging Two Out-Of-State Outfits With Running Illegal Upfront Fee Loan Modification Rackets

In Hennepin County, Minnesota, the Star Tribune reports:

• Minnesota Attorney General Lori Swanson filed lawsuits Wednesday against two out-of-state firms that she says are taking advantage of people in or near foreclosure who seek mortgage modifications. Swanson said the firms represent a new tactic of "advance-fee" mortgage-modification cons that try to capitalize on negative publicity about such schemes by portraying themselves as good guys who can help protect homeowners.

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• The latest lawsuits were filed in Hennepin County District Court. One alleges that a Los Angeles law firm called the Balanced Legal Group and a California lawyer named Deepak S. Parwatikar offered mortgage modification services in Minnesota without being licensed to practice here, and they collected upfront fees of $3,500 or more from clients before performing any services. That's against the law, Swanson said.

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• The defendant in the other lawsuit is a Cheyenne, Wyo.-based firm called Home Protection Coalition, which did business under the name Housing Recovery Program. The suit says the firm claims to be a tax-exempt organization sponsored by the federal government to help struggling homeowners, but it isn't registered as a tax-exempt organization.(1)

For more, see Swanson targets new foreclosure schemes (Attorney general files suits against two firms, accusing them of using a new type of "advance-fee" mortgage-modification con).

For the lawsuits, see:

• State of Minnesota v. The Balanced Legal Group, et ano.,
• State of Minnesota v. Home Protection Coalition, dba Housing Recovery Program.

(1) Reportedly, the firm allegedly copied the distinctive logo of a federal campaign called the "Loan Modification Scam Alert," simply deleting the word "scam" from the logo, and it claims its services are free of charge, but, in fact, it solicits a "donation" of $2,300 before working with clients, the suit says.