Law Firms Lose Mortgage Rescue Court Judgment

Two law firms and their lead attorney on Wednesday lost a default judgment in New York County Supreme Court after allegedly participating in a fraudulent mortgage rescue scheme.

Litvin Law Firm; Litvin, Torrens & Associates PLLC; and the firms’ principal attorney Gennady Litvin were ordered to stop illegal business practices, including preying upon consumers by claiming to offer a full legal services plan that would help them avoid foreclosure. 

The court also ordered Litvin Law Firm and Gennady Litvin, which have recently filed for bankruptcy, and Litvin, Torrens & Associates to provide a full accounting so that New York Attorney General Eric Schneiderman’s office can determine an appropriate amount for restitution for victims, who commonly paid hundreds of dollars in monthly fees for services that were never provided.

Last year, Schneiderman’s office filed a lawsuit against the firms and Gennady Litvin for allegedly offering fraudulent legal services and other foreclosure assistance to consumers in New York and other states. Through television and radio ads, the Litvin Law Firm asked 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.

Through the use of third-party marketers, many using 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 "vitally important" to identify errors in their mortgage loan documents, defend against foreclosure, and win 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.

"Today, these law firms can no longer prey upon vulnerable families desperate to stay in their homes, and my office can begin determining appropriate restitution for their victims," said Schneiderman. "My office has no tolerance for attorneys who abuse their position in order to defraud consumers, and we will continue to take aggressive action against such schemes."