California AG files suit in audit loan modification scam
California Attorney General Jerry Brown has filed a $60 million lawsuit against a pair of Sacramento companies that he says used questionable computer-generated "forensic loan audits" to defraud homeowners seeking to modify their mortgages. Brown sued US Loan Auditors, its sister company, My US Legal Services, the firms' three owners and two attorneys assisting the companies with legal filings. The suit seeks civil penalties, restitution for victims and permanent injunctions against the companies and defendants. The firms, based in Rancho Cordova, work together to market and sell "forensic loan audits" to homeowners, who pay thousands in fees upfront for a dubious computer-generated review of their mortgages, Brown said. The audits purport to show violations of law by lenders. Sales agents use these "audit" findings to encourage homeowners to stop making their mortgage payments and pay additional fees to bring "predatory lending" lawsuits against their lenders. The companies deceive homeowners by suggesting they will earn "legal leverage" to obtain a loan modification and prevent a foreclosure. My U.S. Legal Services bilks clients for months, filing cookie-cutter complaints that have little or no merit, billing unjustified monthly fees, and then dodging clients' phone calls or stringing them along, the AG alleges. In addition to the companies, Brown is suing the three owners: attorney and real estate broker James Sandison; Jeffrey Pulvino; and Shane Barker, as well as two California attorneys, Sharon L. Lapin and Jonathan G. Stein. Someone answering the phones at US Loan Loan Auditors on Thursday afternoon said Sandison, Pulvino and Barker were in a meeting and unavailable for comment. Housingwire also left a voice mail with Pulvino seeking comment. A phone message and e-mail were left with Stein seeking comment. The voicemail box for Lapin was full and a message could not be left. The State Bar recently filed disciplinary charges against Sandison for alleged misappropriation of clients' funds and aiding the unauthorized practice of law, according to Brown, but there is no public action of discipline against him on the Bar's website. Lapin had disciplinary action taken against her in 2006, which resulted in probation, but no suspension of her license, according to the Bar. In the 2006 case, Lapin failed to perform legal services competently, failed to refund unearned fees and didn't respond to client inquiries, according to California State Bar records. Write to Kerry Curry.