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New Jersey Attorney General Goes After Mortgage Scams

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July 15^th, 2009

 

TRENTON, N.J. – Anne Milgram, New Jersey Attorney General announced 2 new lawsuits on July 15^th 2009 that charged 10 individuals and corporate defendants with preying and scamming struggling homeowners seeking to modify their mortgages.

 

According to Milgram, 42 homeowners were affected. The defendants preyed on desperate folks who sought them for help. They gained the trust of these victims through deceptive advertising and misleading sales pitches. They then pocketed thousands of dollars in unlawful fees, provided nothing in return coupled with empty promises and further added financial misery to these victims.

 

The first case consists of attorney Ejike N. Uzor, who has a practice in Linden & Newark, Stephen Pasch of Green Brook Township.

 

The complaint accuses Uzor and Pasch including 7 corporations of violating fraud, advertising and federal debt counseling laws. The details of the lawsuit illustrated that the Newark based companies used deceptive web-advertising, radio-ads and telephone calls from September 2008 - March 2009 to hook homeowners who were in dire straits. These companies charged customers thousands of dollars for the end-goal of obtaining a better home loan. They also offered a money-back guarantee if the company failed.

 

Customers were often urged by these companies to stop making payments while the firm tried to obtain a new loan on their behalf thus putting innocent homeowners in worse financial shape.

 

According to Milgram, when these companies failed to succeed in obtaining a modified loan, they returned only part of the fees and in many cases, nothing at all.

 

A message left at Uzor’s law office was not immediately returned. Pasch’s phone was reportedly disconnected.

 

Similarly, the New Jersey state accused mortgage lender BIRMCO, which is based in Haddon Township of similar offences dating back to November 2008. Milgram said BIRMCO used direct-mail solicitations which included a homeowner’s specific mortgage information. This was the bait to get troubled homeowners to call. BIRMCO promised customers that they would negotiate lower interest rate and lower monthly payments. Similarly with other lawsuits, consumers were charged an upfront fee of several thousand dollars and promised a refund if they failed to obtain a modification agreement. Customers were similarly advised to stop making mortgage payments and to avoid contacting their lenders. These fraudulent firms indicated that this could strengthen their position in seeking a successful loan modification.

 

The innocent customers later learned from their lenders via phone-call that they were delinquent on their mortgages and that nothing had been done to modify their loans.

 

Milgram said that customers ended up working directly with their lenders to get a better loan. BIRMCO normally sends out a letter to the customer claiming credit for the loan modification which in reality, they did not perform. Customers who demanded a refund normally got nothing back in return.

 

Debbie Mangroo of Belleville, paid BIRMCO (Best Interest Rate Mortgage Company), $2,900 to help her modify her loan. She said that the company advised her to stop making mortgage payments for 3 months and advised her that was the only way she would qualify for a lower rate.

 

At that time, she had no suspicions of that advice. Because of BIRMCO, she is now behind on her mortgage.

 

She later worked directly with her lender so as to arrange a way of catching up on her missed payments. BIRMCO finally refunded half of her money.

 

A message left for BIRMCO owner Michael Diplacido Sr. was not immediately returned. Till date, the state has filed 11 mortgage fraud lawsuits since June 2008 against 102 individual and corporate defendants. According to prosecutors, more than 950 people have been affected by the scams. The state has also obtained indictments or guilty pleas in seven criminal mortgage fraud cases involving loans worth nearly $11 million.

 

Milgram reminded homeowners facing foreclosure that free help may be available to them through the state’s foreclosure mediation program.

 

 

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