Raúl Torrez | Attorney General

AG Balderas Sues California Lawyers for Scamming New Mexico Homeowners

FOR IMMEDIATE RELEASE: February 23, 2017 

Contact: James Hallinan (505) 660-2216

At least 23 New Mexico families victimized by the California scam ring

Albuquerque, NM – Today, Attorney General Hector Balderas announced that he filed a lawsuit last night against a group of California lawyers who are scamming New Mexico homeowners out of tens of thousands of dollars in a mass joinder lawsuit scheme. The out of state attorneys file sham mass joinder lawsuits in other
states for upfront fees of $5,000 or more plus a monthly payment from each New Mexico homeowner. The lawsuit alleges that these lawsuits are merely a front for charging upfront fees for mortgage modification services, a practice prohibited by federal law and by the New Mexico Mortgage Foreclosure Consultant Fraud Prevention Act.

“I will not tolerate anyone stealing from New Mexico homeowners seeking assistance with their mortgages,” Attorney General Balderas said. “Preying on New Mexicans at their most vulnerable financial time is disgusting and I will aggressively pursue justice for the families in New Mexico who have been victimized by these California attorneys. I urge anyone in New Mexico who is having trouble making their mortgage payment to contact the Office of the Attorney General for assistance from our Keep Your Home New Mexico program.”

The defendants have filed dozens of mass joinder lawsuits in California courts and none of them have been successful. Most are dismissed by the courts as frivolous and lacking any merit, but yet this scam takes
thousands of dollars in upfront fees from New Mexico homeowners, which is illegal. Despite knowing that these lawsuits are worthless, after the case is dismissed as lacking merit, the defendants sometimes try to get homeowners to pay even more money for appealing the cases.

While marketing these sham mass joinder lawsuits to unsuspecting homeowners, the defendants are trying to get around a federal law, the Mortgage Assistance Relief Services Rule, Regulation O, 16 CFR Part 1015, that prohibits upfront fees for mortgage modification services. New Mexico has a similar law, the Mortgage Foreclosure Consultant Fraud Prevention Act, NMSA §§47-15-1 to 8, that also makes upfront fees illegal for mortgage modification services.

Attorney General Balderas is seeking restitution, fines and an injunction to stop the defendants’ illegal behavior.
The defendants in Attorney General Balderas’ lawsuit include two California law firms and three California Attorneys, two of whom are the subject of disciplinary action by the California Bar. New Mexicans can reach Keep your Home New Mexico by calling 1-800-220-0350 or by visiting www.keepyourhomenewmexico.org.Please see attached for a copy of that lawsuit that was filed last night.

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Raul Torrez

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