Thursday, April 15, 2010

NY Court Slams Loan Modification Racket For Ripping Off Homeowners In Financial Distress; Holds Owner Personally Liable For Damages, Penalties

From the Office of the New York Attorney General:
  • Attorney General Andrew M. Cuomo [] announced a favorable decision in a lawsuit filed by the Attorney General against American Modification Agency, Inc. (“Amerimod”), formerly one of the largest foreclosure rescue companies in the country, and its owner and president Salvatore Pane, Jr. New York Supreme Court Justice Emily Jane Goodman found that Amerimod and Pane engaged in fraudulent, deceptive, and illegal business practices that violated New York’s consumer protection and real property laws.


  • The Court [] ruled [among other things] that Amerimod violated New York’s distressed property consulting statute, Real Property Law § 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 decision and order holds Pane personally liable for engaging in fraudulent and illegal acts, noting that Pane appeared in numerous commercials touting Amerimod’s services, approved expenditures and the content of marketing, and made multiple misleading statements to the press.(1)

For the entire New York AG press release, see Cuomo Announces Favorable Decision In Lawsuit Against New York-Based "Amerimod" Loan Modification Company (Court Rules That Company Fraudulently Charged Homeowners Illegal Fees for Loan Modifications It Never Delivered; Thousands of Homeowners Victimized Nationwide).

In a related story on the Amerimod loan modification racket and its owner and president Salvatore Pane, Jr., see The New York Times: One Last Place to Get Fleeced on a Mortgage.

For the relevant court documents in this litigation, see:

(1) In footnote 3 of her ruling (see permanent injunction, pg. 12), Justice Goodman indicates that the Court will forward the Decision and Order, and the Judgment in this case to the office of the District Attorney, presumably for a consideration of possible criminal charges.