Knock It Off, Nonprofit Tells First One Lending
SANTA ANA, Calif. (CN) - Neighborhood Assistance Corp. of America claims in Federal Court that First One Lending Corp. and its president John Vescera are falsely claiming affiliation with it and charging homeowners up to $1,800 apiece for "worthless" services.
Neighborhood Assistance Corp. (NACA), a nonprofit based in Massachusetts, provides mortgage assistance to low- and moderate-income families in 25 states and the District of Columbia, and has two offices in California, it says in its complaint.
The complaint states: "Defendants' scheme is based on numerous and made numerous false and misleading representations of fact, including, but by no means limited to, false and misleading representations that are purposefully designed to convince vulnerable homeowners that (1) First One is affiliated with, connected to, or associated with NACA, (2) First One is a non-profit public benefit corporation with the specific purpose of expanding affordable housing opportunities to the public and providing counseling services to assist homeowners in avoiding default and foreclosures, (3) First One is affiliated with or sponsored by the U.S. Department of Housing and Urban Development ('HUD'), and (4) First One is a HUD approved housing counseling agency. The purpose of defendants' numerous misrepresentations, including misrepresentations about First One's affiliation with NACA, is to gain the confidence of consumers so that defendants can accomplish their goal: taking hard-earned money from vulnerable homeowners who can ill afford to squander the $1,450 to $1,850 typically charged by First One for its purported services."
NACA continues: "The services that First One purports to provide are essentially worthless. For the $1,450 to $1,850 typically paid, First One does nothing more than submit financial information provided by the homeowner to NACA, which homeowners can do free of charge through NACA's website. As discussed further below, through its Home Save Program, NACA provides homeowners assistance in assembling and submitting documentation to their mortgage servicers free of charge to the homeowner.
"Not only are First One's Services worthless, First One's practice of collecting the fees in advance of a successful loan modification is illegal under California law, which prohibits charging advanced fees for mortgage modification service and requires that the service provider provide a specific notice regarding the availability of the services for free from other sources prior to entering into a fee agreement. Defendants cannot claim ignorance of the relevant California law; in May 2011, First One was ordered by California's Department of Real Estate to desist and refrain from charging any advance fees in connection with mortgage modifications.
Defendants' scheme not only harms individual homeowners, it harms legitimate businesses that lawfully provide mortgage modification services," the complaint states.
NACA says First One is based in San Juan Capistrano, and Vescera, of Orange County, is its president, CEO and sole director. It claims they do business under several names, including First One National Mortgage, National Loan Resolution, National Mortgage Help Center, and National Mortgage Assistance Center.
"First One has a poor business reputation," the complaint states. "On information and belief, numerous First One customers have complaint to First One about its services, and in some instanced have accused First One of fraud and theft.
NACA wants the defendants enjoined from using its name or trademarks, and punitive damages for unfair competition.
It is represented by Christopher J. McNamara, with Kasowitz, Benson, Torres & Friedman, of in San Francisco.