Texas and Florida are taking foreclosure firms to court. But a Nevada law firm has filed a lawsuit against state regulators over suggestions that its staff is not qualified to help borrowers who are facing foreclosure.
Florida Attorney General Bill McCollum announced on Nov. 9 that a lawsuit was filed against National Payment Modification Co. and The Bostonian Group LLC, also known as People's First. William Rodriguez, who is the owner of both companies, was also named as a defendant.
Permanent injunctions on up-front fees, restitution and civil penalties of $15,000 for each violation are sought.
The companies allegedly charge up to $2,500 in up-front fees.
Rodriguez was a founding owner of Wineberg, Lopez, & Rodriguez Co., which was sued in Orange County Circuit Court during March and faced an emergency injunction barring it from charging borrowers advance fees for foreclosure-related rescue services. An investigation by the state found that the up-front fee is charged in five installments using post-dated checks.
"Each check, according to the lawsuit, is associated with a separate 'sub-contract' or step in the loan modification process," McCollum said. "Consumers complained that both companies cash the post-dated checks even though the companies have not begun negotiations or even contacted the consumers' lenders."
Texas Attorney General Greg Abbott announced that an agreed temporary injunction was signed by Dallas County 134th District Judge James M. Stanton against Markus Bailey and Tyrone Bailey. The two must reimburse borrowers and have been barred from operating the unlicensed businesses, Behind on Mortgage and Behind on Mortgages USA.
They allegedly charged up-front fees of at least $1,000 but "provided no measurable foreclosure relief, nor did they negotiate with mortgage servicers." The Texas defendants continued to operate even after an October cease-and-desist order from the Department of Savings and Mortgage Lending.
The state seeks $20,000 per violation of the Texas Deceptive Trade Practices Act in addition to legal costs. Also alleged are violations of the Texas Business and Commerce Code and the Texas Finance Code.
Cogburn Law Offices LLC filed suit this month in Nevada's Clark County District Court against the state's Department of Business and Industry, Division of Mortgage Lending -- successfully obtaining a temporary restraining order preventing the state from suggesting in public statements that its staff who work with its licensed lawyers are not qualified to help borrowers with loan modifications, short sales and deeds-in-lieu-of-foreclosure, the Las Vegas Sun reported.
State of Texas, Plaintiff, v. Tyrone Bailey, Individually, aka T.D. Bailey a/k/a J.D. Baily d/b/a Behind on Mortgage, and Mark Bailey, Individually a/k/a Markus Bailey, d/b/a Behind on Mortgage, USA Defendant.
Cause No. 09-14826 (In the District Court of Dallas County, Texas, 134th Judicial District).