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Arizona Attorney General Files Loan Mod Scam Suits

Arizona attorney general ""Tom Horne"":http://www.azag.gov/ announced the filing of two lawsuits against Arizona companies offering allegedly fraudulent mortgage modification services to distressed homeowners.


Horne brought suits against Phoenix-based ""Making All Homes Affordable, LLC"":http://www.azag.gov/press_releases/aug/2012/MAHA_Complaint.pdf (MAHA) and Tucson-based ""La Paz Source, LLC"":http://www.azag.gov/press_releases/aug/2012/La_Paz_Complaint.pdf, alleging fraudulent practices by the two companies.

The suit against MAHA alleges that the company and its owners, husband and wife team Albert and Esmerelda Figueroa, violated the Consumer Fraud Act by misrepresenting the nature and value of the MAHA program.

Horne's complaint alleges that MAHA salespeople told potential clients that the company's program would help them obtain mortgage modifications. After paying a sum up to $1,885, the clients would find that the program offered little more than access to standardized forms and information that are currently offered for free on government websites.

The complaint also alleges that the company used dozens of fake consumer testimonials on its site to draw business and charged clients a fake ""sales tax"" of 9.3 percent. MAHA's website also includes a warning to users about loan modification scams.

The complaint against La Paz Source, its owners, Maria Beltran and husband Francisco Ramos, and their new operation, La Placita Multi Services, LLC alleges that La Paz Source falsely advertised its services and credentials.

According to the complaint, La Paz Source advertised itself as a provider of foreclosure consultant services. Consumers reported that the company promised to stop the foreclosure process, obtain loan modifications, and communicate with lenders and servicers on behalf of clients.

The defendants allegedly claimed they were authorized to conduct such business in the state when they were in fact not licensed to practice their business. The complaint also alleges that La Paz Source charged large upfront fees and then failed to provide loan modification services, resulting in lost homes in several cases.

The suit also charges La Paz Source with targeting the Spanish-speaking community in order to exploit the language barrier. According to the complaint, the defendants provided contracts written in English and explained the terms in Spanish, allegedly giving consumers information that contradicted the actual terms of the contracts.

Attorney General Horne said the lawsuits should be a warning to distressed homeowners to exercise caution when looking for loan modification services.

""There is still a significant amount of fallout from the mortgage crisis, and consumers need to remain vigilant when approached about mortgage modification services,"" Horne said. ""The legal actions that have been filed serve as a reminder that people need to be very careful about dealing only with reputable servicers.""

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

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