TRENTON, N.J. (Legal Newsline) - New Jersey Attorney General Paula Dow has reached a settlement with a loan modification company and its owners for more than $5 million.
The suit names Cherry Hill, N.J.-based Hope Now Financial Services Corp. and Hope Now Modifications LLC, as well as its principals, Salvatore A. Puglia Sr., and Nicholas F. Puglia Jr.
The settlement of $5,051,253 will resolve all civil charges arising from allegations that the company defrauded homeowners looking for help against possible foreclosures on their properties.
"This is an important outcome, one that should send a message to anyone who might seek to exploit the financial desperation of others during these very difficult economic times," Dow said.
"This company, and these individuals, callously peddled false hope to trusting people-people who needed real loan modification help. It is appropriate that they never again be allowed to sell loan modification or debt adjuster services in New Jersey."
The Cherry Hill companies were charged with asking for up-front fees for their loan modification services. The companies allegedly didn't follow through with any actual help on behalf of those who paid. The defendants also allegedly lied about being connected to the legitimate and similarly-sounding non-profit Hope Now Alliance, with which they had no association.
According to the settlement, the defendants can no longer sell any debt adjustment or loan modification services in the state.
The state's six-count complaint included accusations that the defendants violated the Consumer Fraud Act, the Advertising Regulations and the Debt Adjustment and Credit Counseling Act. They allegedly also used unlicensed debt adjustment activity and offered false hope to their customers.
The defendants were also charged with placing ads on Web sites that misrepresented their services and affiliation with Hope Now Alliance.
The settlement calls for $1 million of the $5 million judgment to be suspended after five years if the defendants comply with all of the conditions of the settlement. The names of all consumers victimized by the defendants will also be sent to the Federal Trade Commission so they can be provided restitution.