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States Charge Fraud By “Mortgage-Relief” Operation

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(Photo by Joe Raedle/Getty Images)

(Photo by Joe Raedle/Getty Images)

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(CBS Connecticut) – Attorneys general in Connecticut and Florida have filed a federal lawsuit against those behind a scheme which they say collected four and three-quarter million dollars from distressed homeowners.

They obtained a temporary restraining order against two law firms and associated persons involved.  Attorney General George Jepsen and Florida’s Attorney General Pam Bondi charge that the operation — known as Resolution Law Group of Connecticut and Berger Law Group of Florida, targeted consumers who were having trouble making their mortgage payments.

They say the participants convinced the homeowners to pay large fees in advance and additional monthly fees to get help dealing with their mortgage companies —  but the attorneys general say that instead of helping the consumers get mortgage modifications or avoid foreclosure, or reduce their interest rates or loan balances,  the law firm did little or nothing to help with the mortgage problems.  Instead,  they say it often worsened the homeowners’ problems,

They say the individuals who organized the scheme have already been sanctioned for a similar operation in California,  and tried to get around federal regulations by claiming to be a law firm,  because of certain exemptions for the practice of law.

The law firms —  called “the RLG/BLG Enterprise” in the complaint — are alleged to have sent what appeared to be class-action notices to consumers, notfying them they were potential plaintiffs in a lawsuit against their mortgage lender or mortgage servicer,  with supposed deadlines for their participation to entice them to sign up,  then subjecting them to high-pressure sales tactics.

The attorneys general say the firms took about four and three-quarter million dollars from distressed homeowners.

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