California Sues Lawyers for Victimizing Homeowners

Four Lawyers Face Charges After Defrauding Homeowners With Mortgage Troubles

by Curtis White on August 31, 2011

The California Attorney General has filed suit against four Southern California lawyers accusing them of, among multiple charges, misleading clients about receiving settlements from lawsuits against banks. Homeowners behind on their mortgages or perilously close to foreclosure thought they had found a source of hope, but we really just taken for a ride. According to Atty. Gen. Kamala Harris, damages are being sought “in potentially the tens of millions of dollars.”

“Yesterday, we broke up what we believe is a fraud ring that is national in scope,” Harris said. “They were engaged in what is called a mass joinder scam.”

Harris stated that the lawyers, along with their law firms and 14 more companies and individuals will stand trial. Victims in the scheme are from California and numerous other states. These victims were allegedly contacted via mass mailings and led to believe that by paying fees from $4,000 to $10,000, they could add their names to a list of plaintiffs in pending lawsuits against banks over mortgages.

As stated in the suit, “Consumers are led to believe that joining these lawsuits will stay foreclosures, reduce their loan balances, entitle them to monetary benefits and potentially get them their homes free and clear of their mortgage.”

“No settlements exist,” stated the filing, “and in some cases no lawsuit has even been filed.”

Harris has identified the main lawyer involved as Philip Kramer. His assets, and those of the other lawyers, have been frozen temporarily and the State Bar of California has seized control of their offices and records.

As the housing market continues to threaten to fall back into recession-year lows, homeowners behind on mortgage payments often search for any means of getting out of debt. This leaves them particularly open to scam artists who may attempt to pay advance fess in order to obtain services.

While the lawsuit filed in California states victims became part of a potential settlement, other scam artists have used tactics like promising to renegotiate mortgage payments or interest rates with banks. Of course, this requires a service fee before the negotiations can begin, often in the thousands of dollars. Once the payment is made, the “loan officers” are often never heard from again.

If you need help trying to deal with back payments on your mortgage, visit the Housing and Urban Development Department website where you can find free, legitimate, loan counselors.

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