LOS ANGELES (CN) – A foreclosure consultant and an attorney conned 2,000 desperate homeowners into paying thousands of dollars for bogus lawsuits to avoid foreclosure, charging a contingency fee up to 80% of the home’s value, California’s Attorney General Jerry Brown said Monday.
Beginning in mid-2008, foreclosure consultant Paul Noe Jr., through his company United First, persuaded homeowners to sign joint venture agreements promising he could help them lower or eliminate their mortgage debt, the state claims in Superior Court.
Noe’s alleged victims paid about $1,800 in upfront fees, plus at least $1,200 per month and contingency fees of up to 80 percent of their homes’ value, according to the complaint.
Noe allegedly hired attorney Mitchell Roth to file lawsuits claiming that the borrowers’ loans were invalid because the mortgages had been sold so many times on Wall Street that the lender could not demonstrate who owned it. The state claims that similar suits in other states never have resulted in the elimination of the borrower’s mortgage debt.
After filing, Roth allegedly did nothing to advance the cases. He often failed to make court filings, respond to legal motions, comply with court deadlines, or appear at hearings, but tried to extend the suits as long as possible so he could collect the monthly fees, Brown claims.
The state claims that Noe, Roth, and United First violated foreclosure consultant laws, engaged in improper running and capping, and violated business codes.
The state seeks $2 million in civil penalties, restitution and a permanent injunction.
The attorney general says Noe was convicted of wire fraud in 1989 and was subjected to a California Department of Insurance Cease and Desist Order in 2004; and Roth resigned from the California State Bar in late May 2009, after the State Bar closed his law firm.