Washington State Regulator: Watch Out For Upfront Fee Loan Modification Ripoffs Masquerading As Forensic Loan Audits, 'Mass Joinder' Lawsuits

From the Washington State Department of Financial Institutions:

• Many Washington consumers have reported receiving misleading advertisements such as the ones shown here:
  
  Sample Advertisement 1,
  Sample Advertisement 2.



• The Department of Financial Institutions has conducted an investigation of the source of these materials, and ascertained that they are neither from the consumer’s lender or any branch of the government, but from companies affiliated with a California law firm, Kramer & Kaslow, and a professional corporation called "Consolidated Litigation Group."



• In late 2010, these affiliated companies sent mailings to Washington consumers for loan modification services; in early 2011, the advertisements were for forensic loan audits (mortgage loan compliance review).



• Fees for loan modification services were reported as $3,000 or more; the "mortgage loan compliance review" was quoted as $2,500, fully refundable if no violations are found. If the modification efforts are unsuccessful, or the forensic loan audit uncovers "predatory lending violations", the consumers are then solicited to become a plaintiff in a mass joinder lawsuit with "Consolidated Litigation Group."



• Initially this inclusion required no extra fees; however, recent consumer reports indicate that the fees to join the "mass joinder lawsuit" are quoted as $1,500 or more.

For more, see Consumer Alert: Kramer and Kaslow (Unlicensed Loan Modification Services and Advance Fees).