The Official Website of the Attorney General of Massachusetts

Attorney General Martha Coakley

Email & Bookmark


Contact:

Emily LaGrassa
Melissa Karpinsky
(617) 727-2543

MARTHA COAKLEY

ATTORNEY GENERAL

March 25, 2009 - For immediate release:

Attorney General Martha Coakley Obtains Temporary Restraining Order Against Company for Deceptively Advertising Foreclosure Relief Services and Soliciting Illegal Advance Fees

BOSTON – Attorney General Martha Coakley’s Office has obtained a temporary restraining order against Express Modifications, Inc., d/b/a “Loan Mods By Lawyers, Inc.,” which ran prominent advertisements in a local newspaper last month offering to help homeowners avoid foreclosure.  In a complaint filed in Suffolk Superior Court today, the Attorney General’s Office alleges that the advertisements were unfair and deceptive, in violation of the Massachusetts Consumer Protection Act, because they falsely give the impression that Express Modifications would provide the homeowner with the services of an attorney, and would guarantee a loan modification that would improve the homeowner’s financial situation dramatically and save the home from foreclosure.  The temporary restraining order prohibits the New York company and its employees from contacting Massachusetts homeowners to offer foreclosure-related services, taking any advance fees for its services, and publishing any false, deceptive, or misleading advertisements concerning its ability to offer loan modifications for homeowners.

“It is troubling that unscrupulous businesses are preying upon Massachusetts residents whose homes are vulnerable to foreclosure,” said Attorney General Coakley.  “Given the current economic crisis, homeowners facing foreclosure already face an uphill battle to save their homes.  We will not allow them to be further victimized by unlawful business practices that seek to take their money based on false promises that, in the end, provide no meaningful relief, leaving homeowners still on the verge of foreclosure.”  

The advertisements in question ran on three dates in February 2009 in the Boston Metro newspaper.  The company offered to assist homeowners to “Save Your Home, Modify Your Loan,” and “Stop Foreclosure; Call NOW!” and directed homeowners to the website LoanModsByLawyers.com.  The Attorney General’s investigation of the company and its operations also revealed that the company demands a $1,500 up-front fee before providing services to help homeowners avoid foreclosure.  Such advance fees are illegal under regulations issued by the Attorney General’s Office in 2007 to combat various unfair business practices that target homeowners facing foreclosure.  The Attorney General’s Office also determined that although the company used the name “Loan Mods By Lawyers,” there appeared to be no licensed attorneys on staff.

The management of the Boston Metro newspaper was cooperative with the Attorney General’s Office in this investigation. 

The Attorney General’s Office encourages homeowners having difficulty paying their mortgages on time because of rising interest rates to speak directly with their lenders or servicers about the prospects of obtaining a loan modification to an affordable payment.  Homeowners can also seek free assistance from organizations in their community that are experienced in advocating on behalf of borrowers. Attorney General Coakley has repeatedly advocated that lenders consider loss mitigation measures such as loan modifications as an alternative to foreclosure which benefits both the borrower and the lender. 

For more information about foreclosure prevention efforts in the Commonwealth and available counseling resources, homeowners can visit www.mass.gov/foreclosure.

Under the order issued on Wednesday by Superior Court Judge Nancy Staffier Holtz, Express Modifications and its owner, David Gotterup, must appear at a hearing on April 8, 2009, regarding the Attorney General’s request for a preliminary injunction.  As part of this lawsuit, the Attorney General’s Office is also seeking a permanent injunction against the company and its owner, restitution for consumers, civil penalties, and the costs of investigation and attorney’s fees.

Assistant Attorneys General David Monahan and Emily Armstrong of Attorney General Coakley’s Consumer Protection Division are handling this matter, with assistance from Investigator Dean Bates.

##########