Legal News Line published a piece today on the action taken by the New Mexico Attorney General against Real Estate Law Center, Erikson Davis, Deepak Parwatikar, Balanced Legal Group, Pinnacle Law Center, Chad Pratt, and Balanced Legal Group.
The Defendants in this case share some overlap with the Brookstone Law debacle that was targeted by the Federal Trade Commission.
The New Mexico Attorney General, Hector Badass (Balderas, said “Preying on New Mexicans at their most vulnerable financial time is disgusting and I will aggressively pursue justice for the families in New Mexico who have been victimized by these California attorneys. I urge anyone in New Mexico who is having trouble making their mortgage payment to contact the Office of the Attorney General for assistance from our Keep Your Home New Mexico program.” – Source
Not much has happened in this case since it was filed. It takes time for actions to work through an already busy court calendar.
In the suit filed by the Attorney General, no words were minced. The complaint says, “Defendants have intentionally misrepresented and deceived New Mexico homeowners by soliciting their participation in frivolous and meritless mass joinder actions, filed in state and federal courts located in California. Defendants take advantage of consumers’ lack of knowledge and experience in foreclosure and loss mitigation. Defendants have charged New Mexico homeowners advance fees in violation of New Mexico law, using the sham mass joinder law suits as a front for the mortgage loan modification services actually provided. Defendant attorneys are not licensed to practice law in New Mexico, and have violated the New Mexico Mortgage Foreclosure Consultant Fraud Prevention Act.”
Just to show you how intertwined these operations are, see if you can follow along the allegations made in the lawsuit.
“Defendant Erikson Davis worked in 2010 to 2012 with Mitchell J. Stein (“Stein”) in a scheme involving a mass joinder case remarkably similar to the mass joinder cases for which Davis subsequently solicited New Mexico homeowners.
Davis assumed ownership of RELC in 2013, on or about the time that Pratt was disciplined by the State Bar of California for filing meritless lawsuits, failing to account for fees claimed earned and failing to refund unearned fees.
Upon information and belief, Pratt and Davis pay 80% of the fees received by RELC to Pinnacle, owned by Parwitakar.
In 2010 Parwitakar was the subject of a law suit by the Attorney General of the State of Minnesota, in which Balanced Legal Group and Parwitakar were charged with illegally charging upfront, or advance, fees for loan modification services. State of Minnesota v. Deepak Parwitikar and The Balanced Legal Group, Case No. 27-CV-10-27052 (Hennepin County, Fourth Judicial District Court, Minnesota).
RELC offers its “Foreclosure Defense Department” to New Mexico consumers despite employing no attorneys licensed to practice law in New Mexico.
The United States District Court in California ordered Davis to personally pay a lender/defendant over $126,000.00 in sanctions because the mass joinder suit was brought “in bad faith” and was clearly “frivolous.”
Chad Thomas Pratt (“Pratt”), was the owner and manager of RELC from approximately September 2011 to September 2013 when he allegedly sold RELC to Davis.
Upon information and believe, RELC has an operating agreement or partnership agreement with Parwatikar and Pinnacle.
In November 2013, the State Bar of California filed disciplinary charges against Pratt in connection with the operation of RELC for (among other things) allowing non-attorney staff to practice law, making false statements to entice clients to retain RELC, failing to return un-earned fees, and for bringing “meritless” lawsuits for consumers.
In 2013, Defendant Davis assumed management of Real Estate Law Center.
On July 21, 2016, the California State Bar Court disciplined Davis for multiple acts of misconduct which significantly harmed a client, the public and/or the administration of justice. See Stipulation re: Facts, Conclusions of Law and Disposition and Order Approving Actual Suspension, In the Matter of: ERIKSON McDONNELL DAVIS, Case Nos. 15-O-14599, 15-O-14705, 15-O-14821, 15-O-15481 etc.
The Stipulation found that Davis “exploited the complainants’ financial difficulties and his fiduciary position by charging and collecting pre-performance fees… and by not providing refunds.” Id.
The conduct for which Davis was disciplined also included failing to supervise non-attorney staff, having the homeowners enter into fee agreements for lender litigation when the homeowners were seeking loan modifications, bringing lawsuits with the ultimate purpose of obtaining loan modifications and charging and collecting pre-performance fees for those lawsuits, thereby committing acts of moral turpitude. Id.
On December 22, 2016, the California State Bar Court filed a Notice of Disciplinary Charges against Erikson Davis for activities related to the mortgage loan modification scheme. In re Erikson McDonnell Davis, No. 197841, Case Nos. 16-O-13378 et al. As of January 6, 2017, Mr. Davis is listed on the State Bar of California website as “Not Eligible to Practice Law in California.”
You can read the entire complaint below.