New Mexico Attorney General Hector Balderas filed a lawsuit in U.S. District Court on Tuesday against a group of California companies and individuals he claims are preying on New Mexicans facing foreclosure.
The complaint alleges the companies have violated state and federal consumer protection laws by sending deceptive mass mailings to more than 4,400 New Mexico homeowners offering foreclosure relief and loan modification.
The mailers were intended look like official government communication and used the logo “Keep Your Home New Mexico” to trick homeowners into believing they came from a program by the same name that was created by the Attorney General’s Office in response to the foreclosure crisis of 2008, the suit says.
“The foreclosure crisis of 2008 created a new category of predators calling themselves ‘foreclosure consultants’ and ‘mortgage modification’ companies,” according to the complaint. “States around the country, including New Mexico, have enacted laws to prohibit such companies from charging upfront fees in advance of their delivery of service.”
But, the complaint says, charging upfront fees for assisting consumers in applying for loan modifications was exactly what the defendants were doing in New Mexico. They’ve also failed to include legally required disclosures and notices in their mailings, such as information about consumers’ rights to withdraw from agreements, according to the complaint.
The suit — which alleges violations of the federal Mortgage Assistance Relief Services Rule, the New Mexico Mortgage Foreclosure Consultant Fraud Prevention Act and the New Mexico Unfair Practices Act — names 10 defendants, all operating out of California.
Some of the defendants are associated with numerous companies and some are attorneys.
Named defendants include Benjamin Borazghi, Thomas A. Moore, Roosevelt Law Center, Matthew Ralph Chaney, Pejaeman F. Ghaneian, Quantum Staffing and Marketing, Secure Settlements, Miracles for Homeowners Marketing and a company called Professional Staffing and Marketing, which allegedly runs at least seven different websites aimed at desperate homeowners.
The suit also lists unnamed companies and individuals and reserves the right to add more names later, saying, “the defendants often use fake names or aliases” in the course of conducting business.
The complaint asks for restitution in amounts to be determined at trial, disgorgement of unlawful earnings, civil penalties ranging from $5,000 to $1 million per day for violations and triple damages for violations.
It also asks the court to temporarily and permanently prevent the companies from continuing illegal practices.
James Hallinan, a spokesman for the attorney general, said the lawsuit arose out of a complaint filed by two different New Mexico consumers last year.
Contact Phaedra Haywood at 986-3068 or firstname.lastname@example.org. Follow her on Twitter at @phaedraan.