So-called loan modification “specialists” are coming under fire for taking thousands of dollars from struggling borrowers in exchange for the promise of lower monthly mortgage payments and not following through. According to the Wall Street Journal, a group of pro bono foreclosure attorneys yesterday filed a lawsuit in State Supreme Court in Nassau County that named several loan modification companies operating out of Garden City, which have allegedly scammed homeowners into believing that they had better chances of getting their mortgage payments modified if they paid for the companies’ services. It’s illegal for “distressed property consultants” in New York to charge up-front fees for loan modification aid, per a statute established in 2008. And these companies, the suit says, “fail to perform even the most basic promised services or achieve any significant results.” The Lawyers’ Committee for Civil Rights Under Law, which filed the suit with Manhattan law firm Davis Polk & Wardwell, said it’s tracked around 500 complaints about similar scams since February 2010. [WSJ]
Pro bono attorneys sue loan mod scammers
