A lawsuit filed Wednesday by New York Attorney General Eric T. Schneiderman's office accuses two law firms and their lead attorney of participating in a fraudulent mortgage rescue scheme.
The lawsuit targets Litvin Law Firm; Litvin, Torrens & Associates PLLC; and the firms principal attorney Gennady Litvin. Litvin and the two firms allegedly took advantage of consumers by claiming they would offer them a comprehensive legal services plan that would allow them to avoid foreclosure or obtain a mortgage modification.
The firms, directly and through their marketers, collected hundreds of dollars in monthly fees from consumers and commonly failed to deliver on the promises. The lawsuit filed in New York County Supreme Court seeks to halt the illegal business practices, provide restitution to consumers, and seeks penalties and costs.
The lawsuit alleges that the firms and Gennady Litvin engaged in fraudulent and illegal practices in offering legal services and other foreclosure assistance to consumers in New York and other states.
Through repeated television and radio ads, the Litvin Law Firm induced consumers to call its offices by falsely implying that they had a connection to "State Attorneys Generals and the Federal Government" and that homeowners could have their mortgages satisfied in full.
"Consumers facing foreclosure place a special trust in attorneys hired to help them navigate the myriad of legal issues they are facing, and our office will hold those accountable who perpetrate scams that prey upon families at risk of losing their home," Schneiderman said.
Through the use of third-party marketers, many that used the term "legal" in their names, the firms solicited homeowners nationwide, representing that the homeowners would have a "custom made attorney defense team" that provided "a level of service that usually is only enjoyed by large corporate clients."
The marketers also purported to provide homeowners with "forensic loan audits" that were critical for identifying errors in mortgage loan documents, defending against foreclosures and winning concessions from lenders.
On its website, the Litvin Law Firm led consumers to believe that it was a law firm with a nationwide presence, located in 31 states, and that the firm had the ability to provide foreclosure defense nationwide.
As described in court papers, based on these representations, homeowners paid the firm and its marketers a monthly fee, typically $595 or $750, to obtain legal services. In many cases, homeowners never spoke to an attorney in their state, never obtained a loan modification or other foreclosure relief and wound up having to negotiate with lenders on their own.
