Mortgage modification fraud by attorneys on the rise

TRD New York /
Jan.January 11, 2013 08:30 AM

When a home owner is seeking a loan modification, they often assume hiring an attorney is their best bet. Increasingly, though, attorneys are lending their names to fraudulent mortgage modification services, the New York Times reported.

The Federal Trade Commission and New York state regulations prohibit upfront fees for loan modifications, the Times said, but with exceptions made for attorneys. It now seems a number of attorneys have taken advantage of that loophole, offering the services for sometimes thousands of dollars in upfront fees, which would be illegal for another entity to charge. Worse still, homeowners often find they don’t even get the services they’ve paid for, the Times said.

Seven suits alleging fraudulent mortgage modification claims by lawyers have been filed on Long Island since 2011, the Times said. Some lawyers are even posting as not for profits, the paper added.

Homeowners who hope to avoid fraud but still want to use an attorney for a mortgage modification should steer clear of those who advertise “loan workouts,” and those for whom loan modifications are their only business. [NYT] –Guelda Voien


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Bill Rudin and Dock 72

No regrets on WeWork bets: Rudin confident on weathering WeWork storm

From left: Simon Baron Development's John Simon, TF Cornerstone's Frederick Elghanayan, and MaryAnne Gilmartin (Credit: Getty Images)

Plaxall joins planning group for post-Amazon development

Inside Berkshire Hathaway’s tri-state expansion strategy

Inside Berkshire Hathaway’s tri-state expansion strategy

220 Central Park South and 960 Fifth Avenue with Aerin Lauder (Credit: Getty Images, Warburg Realty)

Who bought the priciest pads in Manhattan last month?

Cristiano Moura (Credit: Christie’s Real Estate and iStock)

Viral Instagram post leads to arrest, assault charge for former Christie’s agent

arrow_forward_ios