NYC’s first foreclosure-rescue scam lawsuit

Last week, New York City saw the first lawsuit filed under the state's distressed-property consultant law, as MFY Legal Services is suing two companies for taking more than $11,000 from a distressed homeowner and promising her a loan modification. Per the New York Post:

Last week, MFY Legal Services filed a groundbreaking lawsuit on behalf of Queens homeowner Elva Brardo, 60.

The suit alleges that two affiliated companies, American Hope Group and the Donado law firm of Elmhurst, Queens, and seven of their employees swindled Brardo out of $11,885 while breaking the law and failing to save her home. She is now in foreclosure.

MFY says this is the first case in New York City filed under the new distressed-property consultant law — created in 2008 and amended in 2009 and 2010 — which forbids charging upfront fees like the $2,850 Brardo paid American Hope Group for loan-modification services.

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