Kamala’s $4M Mortgage Scam Judgment

Attorney General Kamala Harris keeps Obama and the White House informed on California’s foreclosure issues.

Attorney General Kamala Harris announced this week that defendants who ran a national loan modification scam were ordered to pay more than $4 million in penalties and restitution, including $2 million to consumers who were falsely promised modifications of their mortgage loans. More than 1,000 customers paid more than $2 million for loan modification services to Statewide Financial Group, Inc., which did business as US Homeowners Assistance and Webeatallrates.com, and was based in Orange County. In July 2009, the Attorney General’s office shut down the business, which had been in operation since January 2008. “These defendants took advantage of vulnerable people in extremely difficult circumstances, including many who faced imminent loss of their homes,” said Harris. “The significant financial penalties imposed by the court let scammers know that severe consequences will flow to those who defraud California consumers.” The court ordered that every US Homeowners Assistance loan modification customer should receive a full refund upon request.  The defendants were also permanently enjoined from engaging in the conduct that led to the lawsuit and were ordered to pay $2 million in civil penalties. It is unclear, however, how much money will be recovered and available to pay refunds. The business’ owners were all found liable for violating California’s Unfair Competition Law and False Advertising Law. Harris formed the Mortgage Fraud Strike Force in May 2011 to investigate and prosecute crimes related to mortgages, foreclosures, and real estate. For information go to www.oag.ca.gov.
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