New York Attorney General Says Loan Modification Is A Scam
In his filing, Cuomo accused Amerimod of illegally charging upfront fees and producing misleading advertising sent to homeowners facing foreclosure. His office also issued subpoenas to 13 other loan modification companies, for information on fees, contracts and marketing.
The announcement comes a week after Newsday stories showed a loan modification industry on Long Island that promises to negotiate with homeowners’ banks to modify loan terms on troubled mortgages. Some companies charge thousands of dollars in fees, often upfront.
Cuomo’s effort, combined with proposals for expanded regulation, could mean a smaller loan modification industry, said housing counselor Joan LaFemina of the Community Development Corp. of Long Island.
“My hope is that the people who stick with it really have integrity, but knowing the industry the way it is, there will always be those who operate under the radar and take advantage of the situation,” LaFemina said.
Cuomo’s comment that the industry is a scam is “a great insult,” said Joseph Romano, office manager at Farmingdale-based National Modification Service, which was not been cited by Cuomo. “I stop foreclosure auction sale dates that normally would not be stopped if the client tried on their own.”
Pane said he is following state laws.
“We have always done whatever the attorney general has requested of us and continuously work with them to stay in complete compliance,” he said.
Besides Amerimod, Cuomo subpoenaed five area firms: Nationwide Modification Agency in Hauppauge; Global Modifications Inc. and the Law Offices of Brett Margolin in Ronkonkoma; Loan Modification Affiliate Exchange, or LoanMAE, in Oceanside; Hometown U.S.A. in Plainview; and CloseMore Financial Corp. in New Hyde Park.
Hometown U.S.A. owner Judy Boggio said she stopped doing loan modifications last fall and Global Modification executives told Newsday they changed their practices. The other firms did not return calls for comment or had nonworking phone numbers.
