Keith Loria Oct. 18, 2010, 4:32pm
TRENTON, N.J. (Legal Newsline) - New Jersey Attorney General Paula Dow announced on Monday that she has reached an $800,000 settlement with the owner of several loan modification companies who allegedly defrauded homeowners looking to stop foreclosures.
Stephen Pasch of Greenbrook Township -- the owner of New Day Financial Solutions, American Credit Repair and Settlement, NDROA Inc. and Paramount Debt Settlement USA -- allegedly collected up-front fees from homeowners in return for promised mortgage modification help, a violation of New Jersey's Consumer Fraud Act.
Pasch and his companies allegedly misled consumers through false advertising and deceptive solicitations and engaged in debt adjustment activity without a license in violation of the New Jersey Debt Adjustment and Credit Counseling Act and the federal Credit Repair Organizations Act.
Attorney Ejike N. Uzor of Newark was also named in the suit for allegedly operating Uzor Financial Solutions and Ejike N. Uzor and Associates in a similar manner.
Pasch and Uzor allegedly rarely provided the services that were paid for. The suit further alleged that a Pasch/Uzor "non-profit" known as American Financial Advocacy Council fraudulently sought to instill consumer confidence in the defendants' profit-making operations.
"This case is another example of our commitment to fighting deceptive practices in the mortgage business and related industries, such as loan modification, and to holding accountable those who mislead vulnerable homeowners," Dow said. "Simply put, these companies exploited people who looked to them for hope and paid them for help. This type of activity is reprehensible anytime, but particularly during tough economic times."
Under terms of the settlement, Pasch agreed to pay the state $805,000 and is required to halt all foreclosure rescue business actions in the state. Uzor agreed to pay $25,000. The money will go towards restitution of up-front fees paid by consumers.
The settlement also requires both to be banned permanent from participating in, or soliciting consumers for, any business related to loan modification, debt adjustment or credit repair. In addition, Pasch has a 10 year ban from applying for any banking license from DOBI.
Uzor is prohibited from conducting any loan modification activities and is required to refer any of his legal clients seeking such services to certified non-profit housing counseling agencies.