Cuomo earns victory over foreclosure rescue agency

Nick Rees Apr. 13, 2010, 11:27am


NEW YORK (Legal Newsline) - New York Attorney General Andrew Cuomo has announced that the New York Supreme Court has favorably ruled on his lawsuit against one of the nation's largest foreclosure rescue services.

Cuomo's lawsuit names American Modification Agency, Inc., which is headquartered in Uniondale has offices nationwide, including 10 in New York. The lawsuit alleges that the defendants had engaged in fraudulent, deceptive and illegal business practices in violation of New York's consumer protection and real property laws.

"Amerimod shamelessly victimized vulnerable homeowners, and we are pleased the court recognized this," Cuomo said. "With the Court's decision, Amerimod and its owner will no longer be able to prey on consumers in New York and across the country.

"My office will continue to pursue relief for those victimized by this company's practices."

The lawsuit was filed in August 2009 following an investigation that revealed Amerimod had routinely collected illegal upfront fees from homeowners facing foreclosure and subsequently failed to make good on their promise to modify home mortgage loans or lower monthly mortgage payments, Cuomo said.

Consumers often found themselves worse off financially after signing up with Amerimod and many found themselves unable to obtain information from Amerimod's representatives, Cuomo said.

According to Cuomo's lawsuit, customers were lured in by the company's false and deceptive advertising. Additionally, consumers were not provided with legally required disclosures and notices upon signing up with Amerimod.

New York Supreme Court Justice Emily Jane Goodman, in ruling in Cuomo's favor, found that Cuomo presented "a mass of testimony and other evidence" that demonstrated "Amerimod misled its customers concerning its ability to help them modify their mortgages, and did, in fact, fail to make good on its promises."

The court also noted that once a customer paid Amerimod's fee, the company often failed to attend to the customer. The court also found numerous false claims made by the company in advertisements, including false claims to be "licensed" by a government agency and affiliation with "legal experts" as well as misrepresentations of the number of homes it had saved. The company claimed to have between a 90 percent-100 percent success rate.

Amerimod was also found to have violated New York's distressed property consulting statute by charging illegal, upfront fees for its loan modification services, failing to provide contracts in the native language of its customers and failing to provide homeowners with the legally required notice of their right to cancel within five business days.

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