Swanson sues mortgage services companies

Keith Loria Nov. 29, 2010, 3:00pm


ST. PAUL, Minn. (Legal Newsline) - Minnesota Attorney General Lori Swanson announced on Monday that she has filed two lawsuits against out-of-state companies that allegedly charged Minnesota consumers unlawful fees.

The first lawsuit alleges that Balanced Legal Group of California and its attorney, Deepak Parwatikar, charged homeowners as much as $3,500 to help them renegotiate their home mortgages.

The second lawsuit, against Home Protection Coalition of Wyoming, alleges that the company charged Minnesota consumers as much as $2,300 for mortgage services.

Under state law, companies may not charge homeowners up-front fees before delivering the promised help. Both companies allegedly charged such fees.

The lawsuit against Home Protection Coalition alleges that the organization falsely posed as a 501(c)(3) corporation and mailed Minnesota homeowners solicitations that contained an almost identical logo to the "Loan Modification Scam Alert."

On its website, Home Protection Coalition said, "Due to the current foreclosure crisis, a bill has been introduced to Congress. This bill allows Home Protection Coalition to offer assistance to homeowners through the Economic Foreclosure Stimulus Plan."

It further goes on to deceive consumers by calling its $2,300 fee a charitable "donation," Swanson claims. In addition to charging the company with violations of Minnesota's mortgage modification laws, which prohibit advance fees, the lawsuit alleges that the organization engaged in charitable solicitation fraud.

The Balance Legal Group's website states that, "The banks have attorneys so you need to have a law firm on your side to protect your interests. Your home is one of your most treasured assets. DON'T use a non-attorney company that claims to work with attorneys to try and negotiate a solution concerning this treasured asset."

The website also warns against brokers, attorney-based and attorney-assisted providers.

Swanson said that her office has received an increased amount of complaints involving companies that tout their attorney status to build credibility to get people to sign up for services or by warning homeowners that other fraudulent companies are out there.

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