Mortgage Scams Take Minutes to Nab Consumer But Years to Unwind

I received an update on a case where a receiver had been appointed to liquidate a scam mortgage relief group and provide restitution to consumers.

This goes all the way back to a 2011 action by the California Attorney General against companies selling “Mass Joinder” mortgage elimination.

The pitch seemed like an instantly addictive drug to suffering consumers. They were told, “sold”, lawyers would sue their mortgage lenders in mass and in return they would have their mortgages reduced, eliminated, and/or win money out of the process. Some attorneys that participated buried in the fine print if any mortgage relief was obtained, the lawyers would get up to 30% of the equity in the house. The mailers that were sent out to attract consumers looked like fake official documents.

People practically fought to hand these outfits their money. It was a miracle sales pitch that attracted all sorts of participants.

In the 2011 California action the Attorney General Announced, “Attorney General Harris sued Philip Kramer, the Law Offices of Kramer & Kaslow, two other law firms, three other lawyers, and 14 other defendants who are accused of working together to defraud homeowners across the country through the deceptive marketing of “mass joinder” lawsuits. “Mass joinder” lawsuits are lawsuits with hundreds, or more, individually named plaintiffs.”

“The number of lawyers who have tried to take advantage of distressed homeowners in these tough economic times is nothing short of shocking,” said State Bar President William Hebert. “By taking over the practices of four attorneys accused of fraudulent marketing practices, the State Bar can put a stop to their deplorable conduct as part of our ongoing effort to protect the public.”

The Department of Justice has seized the practices of the following non-attorney defendants:
Attorneys Processing Center, LLC; Data Management, LLC; Gary DiGirolamo; Bill Stephenson; Mitigation Professionals, LLC; Glen Reneau; Pate Marier & Associates, Inc.; James Pate; Ryan Marier; Home Retention Division; Michael Tapia; Lewis Marketing Corp.; Clarence Butt; and Thomas Phanco.

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The State Bar has seized the practices and attorney accounts of the attorney defendants: The Law Offices of Kramer & Kaslow; Philip Kramer, Esq; Mitchell J. Stein & Associates; Mitchell Stein, Esq.; Christopher Van Son, Esq.; Mesa Law Group Corp.; and Paul Petersen, Esq.

Today, Three Years Later

Nearly three years later the court appointed receiver is still trying to distribute restitution to defrauded consumers. But as is typically the case, there is little to return. And as a telling issue, even one of the participants, Mitchell Stein, is gumming up the works with continued criminal charges and cases against him.

The receiver said, “The case has not yet concluded due to Mitchel Stein’s unrelated criminal case in Florida. That sentencing is now set for December. The California Attorney General and the State Bar have decided, nonetheless, to push forward. They will soon apply to the Court for approval of a Restitution Program. This plan, if approved, will be administered by the Receiver from funds remaining frozen in accounts of the Attorney Defendants. We will provide a link to the motion once it is filed.

If the Restitution Program is approved, the Receiver will commence implementation immediately. Since the available fund is not large (approximately $600,000) and the projected number of claims is high, this restitution will not cover all amounts paid by clients to their attorney and will be paid out on a per capita basis.” – Source

And the part of this that fell through the cracks, damaged by the scam, and left to fend for themselves, was the consumers that fell for the sales pitch.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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