Pa. AG files suit against mortgage rescue firms

By Nick Rees | Nov 24, 2009

Tom Corbett (R)

HARRISBURG, Pa. (Legal Newsline) - Four mortgage rescue businesses and their officers are facing lawsuits from Attorney General Tom Corbett over alleged deception of Pennsylvania consumers who were seeking help modifying their mortgage loans.

"Consumers struggling with high interest rates or large loan payments were drawn to these businesses by misleading ads, deceptive websites and false promises of 'permanent changes' to their mortgages," Corbett said. "Instead, many consumers paid large up-front fees that resulted in little, if any, relief from their mortgage problems - leaving them in even worse financial situations."

The civil lawsuits name Foreclosure Awareness Inc., of Bensalem and Boca Raton, Florida, and owner Michael Squillace; Nationwide Foreclosure Prevention Center LLC, of Williamstown, NJ, and owner
Robert P. Valentin; Best Interest Rate Mortgage Company LLC, of Huntingdon Valley, PA and Westmont, NJ, and company President Michael J. Diplacido; and U.S. Mortgage Mod LLC, of Philadelphia, and owner Marc Dambrosio.

"For most consumers, their home is their single most valuable asset," Corbett said. "Any business involved in credit-related activities, including loan modification and 'mortgage rescue' services, must give consumers clear and detailed information about the process before accepting payment."

In addition to false and misleading claims about their ability to modify loans, Corbett said, some of the companies also allegedly used deceptive mailings designed to appear as if they were sent from a government agency or government-related program.

Consumers were also not provided with state-required financial disclosure from the defendants, who also failed to inform consumers of their five-day right to cancel. Additionally, up-front fees were
accepted without posting the necessary surety bond or trust account.

Some of the companies are also alleged to have not been licensed by the Pennsylvania Department of Banking to handle mortgage loans or loan refinancing.

The lawsuits come as part of an ongoing statewide investigation into loan modification services. The investigation is being conducted by the attorney general's Bureau of Consumer Protection in conjunction with the state Department of Banking, the Pennsylvania Department of State and the Pennsylvania Housing Finance Agency.

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