SAN FRANCISCO (CN) - The National Mortgage Help Center and its unscrupulous owner scammed homeowners by advertising loan modification assistance, then charging to refer them to predatory lenders, the Neighborhood Assistance Corporation of America claims in court.
The Neighborhood Assistance Corporation of America (NACA) sued Connecticut-based Matthew Goldreich and his companies National Media Connection and National Mortgage Help Center.
Many homeowners who responded to the defendants' ads "discovered that the National Mortgage Help Center was a sham - or worse, have been scammed by Goldreich's and NMC's unscrupulous clients - were and continue to be disgusted by the fraud to which they fell victim and consequently have ceased participating in the market for mortgage assistance services," according to the complaint.
NACA claims it offers legitimate services to consumers, and that Goldreich scams them, competing deceptively and unfairly and violating trademark. It claims Goldreich has advertised his scam widely, including on network TV.
Goldreich sells himself as an "expert in television and radio infomercial and short form marketing," the complaint states. But actually, he "scams" desperate homeowners and leaves them "disgusted" after fleecing them and passing them along, NACA says in the complaint.
NACA claims the National Mortgage Help Center is a "fictitious entity" Goldreich created to profit from "the current economic crisis by developing fraudulent advertisement campaigns designed to gain the trust of desperate consumers and then selling those consumers as sales leads to the highest bidder - often to predatory financial services companies peddling bogus products."
Suckers who contact the National Mortgage Help Center are connected to third parties whose only qualifications are that they paid "substantial sums of money" to it and Goldreich for leads, the complaint states.
Goldreich's ads are "blatantly false or extremely because the National Mortgage Help Center did not and does not provide the advertised services," the complaint states. In fact, the defendants offer the victims to the "loan modification scam industry," NACA says.
The complaint cites nine false and misleading statements the defendants allegedly make in ads, including, "A new government stimulus now offers incentives to your mortgage company to work with us [National Mortgage Help Center] on your behalf"; and "The recent government bailout includes a plan to help struggling homeowners and our [National Mortgage Help Center's] trained specialists know how to make it work for you"; and "In some cases we [National Mortgage Help Center] can get your rate lowered all the way to 1 percent and get your mortgage payment cut in half." (Brackets in complaint.)
NACA cites five people who sought loan modification assistance from defendants and were connected to (nonparty) First One Lending Corporation. All five were "scammed" for $1,500 or more in hopes of receiving loan modification assistance, according to the complaint.
NACA seeks an injunction, restitution and disgorgement of unjust profits.
It is represented by Christopher McNamara, with Kasowitz, Benson, Torres & Friedman.
NACA says it can sue in San Francisco because the defendants advertise there.