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Reader Wants a Mortgage Law Group Lawsuit Update

By on May 23, 2016

Question:

Dear Steve,

Can you advise us readers as to the status of the CFPB case against the mortgage law group? What is happening?

Answer:

Dear Anonymous,

So the Consumer Financial Protection Bureau (CFPB) sued the Mortgage Lw Group in 2014. See this, this, and this.

I took a look at the court docket and the case is still ongoing. Here are some updates I spent loads of time reading for you.

On January 14, 2016 a Summary Judgment was awarded in part to the CFPB. From the document:

“Plaintiff Consumer Finance Protection Bureau brought this action against two defunct firms and four lawyers associated with those firms, alleging violations of the Consumer Financial Protection Act of 2010 and 12 C.F.R. part 215, which is commonly called Regulation O. Specifically, plaintiff alleges that while providing mortgage relief services to more than 6,000 consumers in 39 states, defendants The Mortgage Legal Group, LLP and Consumer First Legal Group, LLC made misrepresentations about their services, in violation of Regulation O and the Consumer Financial Protection Act; failed to make certain disclosures required by Regulation O; and collected advance fees in violation of Regulation O. Plaintiff contends that defendants Thomas G. Macey, Jeffrey J. Aleman, Jason E. Searns
and Harold E. Stafford are liable because they either participated directly in the illegal acts or had the authority to control the actions of the corporate defendants. Before the court are the cross motions for summary judgment filed by plaintiff and defendants Consumer First Legal Group, LLC, Thomas G. Macey, Jeffrey J. Aleman, Jason E. Searns and Harold E. Stafford. Dkt. ##83 and 96.

Defendant The Mortgage Law Group, LLC has not filed an answer to the complaint or taken any other action in its defense. (Plaintiff explains that The Mortgage Law Group filed a voluntary Chapter 7 bankruptcy petition that is pending in the United States Bankruptcy Court for the Northern District of Illinois, but the automatic stay provision of the bankruptcy code, 11 U.S.C. §§ 362(a) and (b (4), does not stay the bureau’s action because it falls within the police and regulatory power exception to the stay. Dkt. #118 at 10 n.1 (CM/ECF numbering). Therefore, unless I specify otherwise, I will use the term “defendants” in this opinion to refer only to defendants Consumer First Legal Group, Macey, Aleman, Searns and Stafford and not The Mortgage Law Group.” – Source

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It seems there was some confusion exactly who was behind the Mortgage Law Group, at least in this deposition.

Q Okay. You didn’t do any loan modification work for Legal Helpers?

A No.

Q Okay. What about the Mortgage Law Group, have you ever heard of that organization?

A You know, that was — now that you say — yeah, I remember that name. I remember being asked if I would be available to do work for the organization and never did anything and, as a matter of fact, the — that was the — that was the — that was — I had gotten a call from Alice Omahar at the OLR about that and asked me if I had ever done any work because there was a complaint filed by Dorothy Dean, who is a — Dorothy Dean is a State Representative in Milwaukee. Dorothy Dean had never heard of me. The — her constituent had never heard of me. I didn’t hear — I didn’t know anything about this program and so I responded to Alice Omahar, and her response to me was send a letter — and I don’t remember who that letter was addressed to, but send a letter indicating that you don’t want anything to do with this program, you haven’t done anything, and you’re not a part of it. And that’s what I did and forwarded a copy of that to Alice Omahar and —

Q Send a letter to who?
A The person who was in charge of this Mortgage Law Group that I never — had never done any work for, didn’t even know that it was really out there soliciting clients — still don’t know if it is.

Q And who was that person?
A I’d have to pull that letter that was sent, that — but I sent that letter to the Mortgage Law Group. Can’t remember who the person was that I sent it to, but then sent a copy to Alice and sent a copy to Representative Dorothy Dean.

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Q Do you still have a copy of that letter?
A I’m sure I do.

Q Okay. All right. So I’m just going to make sure I’ve got your testimony on the issue of The Mortgage Law Group and loan modifications in general. Regardless of whether your name is on a document listed as an attorney for Mortgage Law Group, is it your testimony that you’ve never reviewed a loan modification packet for a Wisconsin consumer?

A I don’t recall doing it. I mean I don’t — unless I was looking at something — I don’t even know what one would look like, so I don’t — I can’t — I can’t state for certain or recall if I did or not. – Source

Summary

It appears the Mortgage Law Group was doing business as The Law Form of Macey, Aleman & Searns. The Mortgage Law Group does not seem to have provided any defense yet.

On April 7, 2014, The Mortgage Law Group filed for Chapter 7 bankruptcy protection.

The bankruptcy petition was signed by Jeffrey J. Aleman as a Member / Manager.

The court did lift the automatic stay in other action against the firm. – Source

So to answer your question, it looks like the case is ongoing and it does not appear the bankruptcy The Mortgage Law Group filed is going to protect it from the case moving forward. But then again the firm has not defended itself.

It remains ongoing and unsettled.

About Steve Rhode

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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