Monday, February 27, 2017

NM AG Belts Three Out-Of-State Lawyers With Civil Suit For Allegedly Targeting Financially Strapped Homeowners, Clipping Them Out Of Upfront Fees, Monthly Payments In Mass Joinder Lawsuit Scam

From the Office of the New Mexico Attorney General:
  • Attorney General Hector Balderas announced that he filed a lawsuit last night [February 22] against a group of California lawyers who are scamming New Mexico homeowners out of tens of thousands of dollars in a mass joinder lawsuit scheme.

    The out of state attorneys file sham mass joinder lawsuits in other states for upfront fees of $5,000 or more plus a monthly payment from each New Mexico homeowner. The lawsuit alleges that these lawsuits are merely a front for charging upfront fees for mortgage modification services, a practice prohibited by federal law and by the New Mexico Mortgage Foreclosure Consultant Fraud Prevention Act.
    ***
    The defendants have filed dozens of mass joinder lawsuits in California courts and none of them have been successful. Most are dismissed by the courts as frivolous and lacking any merit, but yet this scam takes thousands of dollars in upfront fees from New Mexico homeowners, which is illegal. Despite knowing that these lawsuits are worthless, after the case is dismissed as lacking merit, the defendants sometimes try to get homeowners to pay even more money for appealing the cases.

    While marketing these sham mass joinder lawsuits to unsuspecting homeowners, the defendants are trying to get around a federal law, the Mortgage Assistance Relief Services Rule, Regulation O, 16 CFR Part 1015, that prohibits upfront fees for mortgage modification services. New Mexico has a similar law, the Mortgage Foreclosure Consultant Fraud Prevention Act, NMSA §§47-15-1 to 8, that also makes upfront fees illegal for mortgage modification services.

    Attorney General Balderas is seeking restitution, fines and an injunction to stop the defendants’ illegal behavior.

    The defendants in Attorney General Balderas’ lawsuit include two California law firms and three California Attorneys, two of whom are the subject of disciplinary action by the California Bar.(1)
For the press release and the lawsuit, see AG Balderas Sues California Lawyers for Scamming New Mexico Homeowners Out of Tens of Thousands of Dollars (At least 23 New Mexico families victimized by the California scam ring).
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(1) The California State Bar's Client Security Fund is a public service of the California legal profession, intended to help protect consumers of legal services by alleviating losses resulting from the dishonest conduct of attorneys. The amount the fund may reimburse for theft committed by a California lawyer depends on when the loss occurred. A maximum of $50,000 is reimbursable if the loss occurred before January 1, 2009. A maximum of $100,000 is reimbursable if the loss occurred on or after January 1, 2009.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

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