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Attorney General Kilmartin Shuts Down Fraudulent Mortgage Modification Consultants and Secures Restitution for Homeowners

Attorney General Peter F. Kilmartin announced the Office of Attorney General prevailed in shutting down two fraudulent mortgage modification consultants and securing $5,500 in restitution for three consumers.

“These unscrupulous individuals prey on homeowners who are in jeopardy of losing their homes and desperate to do anything to save it from falling into foreclosure. It is despicable for anyone to take advantage of these hard working homeowners,” said Attorney General Kilmartin. “

As a result of consumer complaints received in 2010 the Office of Attorney General conducted an investigation into two individuals holding themselves out as representing Mortgage Modification Center, IMOD Corporation and Latin Service International, which all claimed to provide mortgage modification and foreclosure services.

The investigation discovered that the individuals, David Conti and Lucy Ruiz, were advertising and soliciting consumers in violation of several laws including the Deceptive Trade Practices Act and the Mortgage Foreclosure Consultant Regulation Act.

The Attorney General alleged that since at least April 2009, Conti and Ruiz advertised, marketed and sold purported mortgage loan modification and foreclosure rescue services, with a focus on targeting the Hispanic community. Conti and Ruiz also engaged in a scheme to swindle distressed homeowners by enticing them with promises of negotiating loan modifications with lenders, representing that they could secure lower, fixed interest rates, principal reductions, lower monthly payments and forgiveness of arrearages.

Conti and Ruiz required homeowners to pay an upfront fee ranging from $1,000 to $3,000 in advance of providing services. It is further alleged that, Conti and Ruiz refused to refund homeowners’ money despite not performing the services for they were contracted.

In a settlement agreement with the Attorney General, Conti and Ruiz were enjoined from doing business as mortgage foreclosure consultants and agreed to cease and desist from doing business as mortgage modification specialists. Conti and Ruiz also agreed to pay restitution to the three consumers who initiated the complaints and investigation.

“Rhode Islanders should never pay upfront fees for help avoiding foreclosure,” continued Kilmartin noting that under the Mortgage Foreclosure Consultant Registration Act, it is illegal for companies to charge any fees, whatsoever, for foreclosure assistance until they receive all the services for which they paid. “There are legitimate, free services available for homeowners that don’t require thousands of dollars in charges and fees.”

There remains an ongoing investigation into the professional relationship between Conti and Ruiz and the mortgage modification companies they claimed to represent.

The Office of Attorney General is a partner in the Loan Modification Scam Alert campaign, which provides information and assistance to homeowners seeking mortgage loan modifications. The working group is hosting a Foreclosure Prevention and Loan Modification Scam Alert Consumer Forum, Wednesday, September 21st, 5 – 7 p.m., Pawtucket Visitors Center, 175 Main Street, where homeowners can receive information on mortgage modification and HUD approved counseling agencies. For more information on the free Forum, please contact the Office of Attorney General, Consumer Protection Unit at 401-274-4400, ext. 2397.

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