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Continuing the State’s on-going efforts to thwart fraudulent “mortgage loan modification” enterprises, Attorney General Paula T. Dow and the State Division of Consumer Affairs filed administrative actions against seven businesses for illegally offering mortgage modification services to homeowners in dire financial straits. State law requires that anyone providing these services in New Jersey be licensed as a Debt Adjuster by the Department of Banking and Insurance, or be otherwise authorized.
The Division of Consumer Affairs filed Notices of Violation against the illegitimate businesses, which offered mortgage loan modification services even though they were not licensed to do so in New Jersey. The State is seeking $35,000 in civil penalties and $49,434 in consumer restitution from the companies. The amounts sought in consumer restitution represent the fees paid by approximately 10 consumers for mortgage loan modification services.
The Notices of Violation also provide that the companies, cited for violating the state’s Consumer Fraud Act and Debt Adjustment and Credit Counseling Act, must cease and desist from offering debt adjustment services. The companies have the option of contesting the Notice of Violation and requesting a hearing.
Thomas R. Calcagni, Director of the State Division of Consumer Affairs, said that the violations were filed as part of the Division’s ongoing initiative to crack down on mortgage modification businesses operating outside the law.
Calcagni noted that the Division of Consumer Affairs created its Financial Fraud Unit, within its newly reorganized Office of Consumer Protection, specifically to focus on mortgage-related frauds that prey on the hopes and fears of homeowners struggling amid financial hardship, and desperate to keep their homes. In the past year, the Division has recovered more than $2.2 million in actual restitution dollars for desperate New Jersey homeowners who had been victimized by predatory mortgage practices and mortgage-related scams.
The seven companies served with a Notice of Violation are:
- Dunwell Financial Services, LLC - Jersey City
- Home Mitigation Group - Matawan
- Loss Mitigation Consultant Services - Paulsboro
- Rose MM, LLC - Newark
- Save Americas Mortgages Corp. - Fort Lee
- TWI Corp. - Winter Garden, Fla.
- Continental Associates, Ltd. - Commack, N.Y.
A mortgage loan modification involves changing the terms of an existing loan – for example, by lowering the monthly payments, adjusting the interest rate, extending the length of the loan, or in some cases decreasing the unpaid balance.
The only types of business that can engage in mortgage loan modification services in New Jersey are:
- Nonprofit organizations licensed as Debt Adjusters by the State Department of Banking and Insurance;
- The lender or owner of the loan;
- The mortgage servicer acting on the lender or owner's behalf; or
- An attorney, provided he or she is not primarily engaged in debt adjustment.
The Department of Banking and Insurance provides a complete listing of all licensed Debt Adjusters in New Jersey at www.state.nj.us/dobi/division_consumers/finance/counselors.html
To help consumers learn about more about avoiding mortgage-related scams, and how to obtain genuine assistance, the Division of Consumer Affairs has written a consumer brief that can be viewed at www.NJConsumerAffairs.gov/brief/mortgage.pdf .
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website, www.NJConsumerAffairs.gov, or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200. | 