Ariz. AG settles with mortgage loan modifier

By Bryan Cohen | Apr 30, 2012


PHOENIX (Legal Newsline) - Arizona Attorney General Tom Horne announced a settlement on Thursday with a Scottsdale-based mortgage loan modification service that allegedly participated in a deceptive scheme to collect advance fees from consumers.

Underwater Property Solutions, LLC allegedly attempted to collect fees from consumers looking for aid in obtaining mortgage loan modifications. In almost all cases, it is against state law for businesses to charge fees upfront for loan modifications.

UPS was named the co-defendant in a consumer fraud lawsuit, along with The Mortgage Law Group LLP, which also does business as the Chicago law firm of Macey, Aleman & Searns. The litigation against TMLG is still pending.

UPS allegedly agreed to market mortgage modification services to consumers with legal services to be performed by attorneys at TMLG, including local state partners where TMLG's clients lived. UPS allegedly did close to all of the substantive work for consumers who paid retainer fees to TMLG. Additionally, UPS allegedly told consumers that TMLG would be able to stop foreclosures and that a modification was guaranteed if they hired TMLG. UPS allegedly claimed that the consumers would save hundreds of dollars a month due to the modifications, when in reality, the representations were speculative and typically proved to be false.

The settlement with UPS, which awaits court approval, would permanently prohibit UPS from engaging in consumer loan or debt modification activities in Arizona or on the behalf of Arizona consumers. Under the terms of the agreement, UPS would have to pay full restitution to consumers who filed a complaint with Horne's office in addition to attorney's fees.

UPS did not admit any violations of the law as a part of the agreement.

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