Massachusetts Attorney General Martha Coakley acts against two companies for alleged foreclosure scams

Attorney General Martha Coakley on Thursday warned Massachusetts homeowners to be wary of foreclosure-rescue scams, citing two legal actions her office filed against local companies that allegedly took advantage of people trying to save their homes.

Coakley claims both companies unlawfully required upfront payments from homeowners trying to avoid foreclosure, among other violations. Despite astate law banning such pre-payments, she said, many people still fall victim to the tactic.

“We allege these defendants preyed on distressed homeowners, often requesting advance payment in violation of the law,’’ Coakley said. “Homeowners should be aware of their rights and know that our office has resources available to help them.”

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In the first case, Brighton-based iMod Corp. and its affiliated law firm, Lombardi & Stephenson, agreed to pay $20,000 in restitution to settle allegations they charged homeowners in advance for help with loan modifications.

In court documents filed in Suffolk Superior Court, iMod president and law firm partner Kendra Stephenson agreed to stop collecting money in advance of offering foreclosure-related assistance to borrowers. Stephenson will also return $4,500 to three homeowners and pay $15,500 to the state, according to court filings.

Stephenson said Thursday that the settlement did not include an admission of guilt, but she declined to discuss details of the allegations.

The state this week also sued Pinnacle Financial Consulting LLC, based in Lawrence, and its owner Robert Burton in Suffolk Superior Court for alleged taking advantage of a largely minority and non English speaking population of desperate homeowners.

The state claims the company would accept money from clients, but provide them with little or no help. In addition, the state says Pinnacle offered legal advice without holding a licence to practice law in Massachusetts. Officials at Pinnacle could not be immediately reached for comment.

With the state in its seventh consecutive year of having a higher than normal foreclosure rate, Coakley reminded homeowners to be aware of predators seeking to profit from mortgage holders’ financial difficulties. She urged homeowners to never transfer the title of their home to another party or heed recommendations to stop paying their mortgage as a way to get financial help.

More information is available through the state’s HomeCorps office at 617-573-5333.

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