Friday, September 22, 2023
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California’s Attorney General Hits Mortgage Modification Companies with $60M Lawsuit

(CN) - California Attorney General and gubernatorial hopeful Jerry Brown on Wednesday filed a $60 million lawsuit against two Sacramento companies that he says targeted hundreds of desperate homeowners with bogus promises to modify their loan mortgages through futile lawsuits.

Named as defendants in the lawsuit filed in Sacramento Superior Court are US Loan Auditors and My US Legal Services, along with James D. Sandison, Shane Barker, Jeffrey Pulvino, Sharon Lapin and Jonathan Stein.

Brown targeted the companies' marketing scheme that he says promised to give homeowners mortgage modifications through computer-generated "forensic loan audits."

"Defendants use a variety of deceptive advertising and marketing techniques to persuade homeowners that they have been victims of 'predatory lending,' they have have a strong legal case against their lender... and that filing a lawsuit will give them 'legal leverage' to obtain a loan modification, stave off foreclosure andor recover damages," according to the lawsuit filed in Sacramento Superior Court.

"Defendants charge consumers thousands of dollars for a dubious 'forensic audit' of their loan documents, plus recurring, monthly fees of $1,000 or more to fund a 'predatory lending' case in state or federal court.

"Based on the result of these 'forensic audits,' which are prepared by non-lawyers and without any attorney supervision, defendants have filed 'cooker-cutter' lawsuits for hundreds of clients. These cases have overwhelmingly been dismissed at the pleading stage, have failed to result in any favorable settlements or adjudications, and would not, in any event, entitle consumers to the sweeping relief promised by defendants."

In a statement, Brown said, "These defendants dangled the term 'forensic loan audit' as a sure-fire remedy for the mortgage problems of homeowners in distress. In fact, it was no remedy at all, and hundreds of desperate California homeowners took the bait and lost their money -- and sometimes their homes."

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