AG closes RI to mortgage sharks
In a press release last Thursday, the Attorney General’s office reported that it enjoined an out-of-state law firm from doing business in Rhode Island and ordered them to return $8,000 to a Rhode Island resident.
“After receiving a consumer complaint, Attorney General Peter F. Kilmartin initiated an investigation into the Litvin Law Firm for allegedly charging homeowners steep up-front fees for mortgage modification services. Through the course of the investigation, it was determined the New York-based law firm was in violation of Rhode Island’s Deceptive Trade Practices Act and the Mortgage Foreclosure Consultant Regulation Act. In addition, it was determined the law firm was not licensed to practice in Rhode Island.”
As a result, Superior Court Associate Justice Luis Matos signed an order that requires Gennady Litvin, individually, and Litvin Law Firm, P.C, as well as its employees and agents, to be enjoined and restrained from doing business in Rhode Island as foreclosure consultants, mortgage modification providers and claiming to be foreclosure consultants or debt managers under the terms of the Mortgage Foreclosure Consultant Registration Act. The Court also prohibited its associates practicing law without a license in Rhode Island.
Consumers who contacted Freedom Legal Plans or Consumer Legal Plans paid thousands of dollars in up-front fees, the work would be farmed out to Litvin Law Firm and others. Litvin referred to itself as a “national law firm with local attorneys in your state.” Litvin was not licensed in the state of Rhode Island.
“Out-of-state attorneys who are not licensed by the Rhode Island Bar Association should not be allowed to profit from homeowners who are struggling to stay in their homes. The promise of a mortgage modification may be no more than a promise and that’s why no one should charge an up-front fee in violation of Rhode Island laws,” said Attorney General Kilmartin. “For homeowners struggling to pay their mortgage, there is free assistance from Rhode Island Housing and other HUD-certified loan counseling agencies based here in Rhode Island. There is no need to pay thousands of dollars in up-front fees to companies that promise help but provide little or no real assistance other than draining your finances.”
Under the settlement, Litvin agreed to pay more than $8,000 in restitution to the consumer and cooperate with the Attorney General for any future complaints.
Under the Mortgage Foreclosure Consultant Registration Act, it is illegal to charge any fees until consumers receive all the services they contract. There are numerous local organizations that provide free, HUD-certified counseling and mortgage modification assistance.
If you believe you have been a victim of a fraudulent mortgage modifier, contact the Consumer Protection Unit of the Rhode Island Office of Attorney General at 274-4400 or by visiting www.riag.ri.gov.