New York attorney general Andrew Cuomo is turning his efforts on loan modification companies. On Tuesday, Cuomo’s office announced it intended to file suit against American Modification Agency — also called Amerimod — and owner Salvatore Pane Jr. Cuomo says his investigation into Amerimod found the company charged hefty up-front fees in violation with state law, advertised falsely that it saw a 90 to 100% success rate. The AG’s office also alleges the company didn’t provide necessary contracts that would have included a required notice of right-to-cancel. “This economic climate has bred an environment in which scam artists and opportunists are able to prey on vulnerable consumers on the brink of losing their most valuable possession — their home,” Cuomo said in a media statement Tuesday. The NY AG’s response is to investigate companies that promise loan modifications but seem to prey on borrowers at risk of foreclosure. His actions come in response to New York homeowners that the companies failed to deliver the promised services. “Companies that charge homeowners up front fees for loan modification services, put homeowners into contracts that don’t disclose cancellation rights, or lure consumers with misleading claims violate not only our trust but the law,” Cuomo adds. “Today’s notice and the subpoenas issued nationwide are part of my office’s multi-tiered effort to stamp out this kind of abuse and protect homeowners across the country.” Cuomo also issued subpoenas to 14 other modification groups including American Home Recovery Corp., CloseMore Financial Corp. and Elite Results Group. The subpoenas request details on marketing strategies, representations by the companies regarding what services they offer, success rates, fee structures and whether contracts are provided and services performed. Write to Diana Golobay.
Most Popular Articles
It looks like borrowers who don’t fit neatly into Fannie Mae and Freddie Mac’s lending criteria could soon be running out of options if they want to buy a house. Over the last week, many (if not all) of the biggest lenders specializing in lending to borrowers outside the QM lending box paused their activities due to uncertainty in the market. And now it appears that FHA lending as we know it is disappearing from the market too.
HousingWire recently sat down with Jay Kingsley, executive for credit and borrower solutions at CoreLogic, to discuss the company’s AutomatIQ offerings.