PHOENIX (Legal Newsline) - Arizona Attorney General Tom Horne announced a settlement on Friday with a Chicago-based law firm that allegedly attempted to collect advance fees from consumers looking for assistance in obtaining mortgage loan modifications.
The Mortgage Law Group, also known as Macey Aleman & Searns, and co-defendant Underwater Property Solutions, based in Arizona, allegedly marketed mortgage modification services to consumers as legal services that would be performed by attorneys at TMLG and local partners in the state. Underwater Property Solutions' non-lawyer employees allegedly did almost all of the substantive work for consumers that paid retainer fees to TMLG.
"Lawyers should be especially careful to avoid misrepresentations to consumers and to follow laws regulating mortgage loan modifications," Horne said. "In this case, Mortgage Law Group targeted an especially vulnerable group of consumers - borrowers facing possible foreclosure."
In most cases, it is illegal for a business to charge consumers upfront fees for loan modifications.
Underwater Property Solutions, acting on the behalf of TMLG, allegedly misrepresented that consumers were guaranteed a modification if they hired TMLG, that TMLG could stop foreclosures and that consumers would be able to save hundreds of dollars a month with their payments. The representations were nothing but speculation and typically proved false.
The settlement permanently bans TMLG from engaging in any loan modification or consumer debt activities in Arizona or on behalf of Arizona consumers. Additionally, TMLG must pay $39,280 in restitution and $60,000 in attorneys fees.
Under the terms of the settlement, TMLG admitted no wrongdoing.
A consent judgment with Underwater Property Solutions was approved in May.