Lawyers’ Committee & Partners File Suit for Mortgage Rescue Scam Targeted at Hispanics

WASHINGTON, D.C. – March 15, 2012 – (RealEstateRama) — On March 6, 2012, K&L Gates, LLP, the national Lawyers’ Committee for Civil Rights Under Law (Lawyers’ Committee), and the Washington Lawyers’ Committee for Civil Rights and Urban Affairs (Washington Lawyers’ Committee) filed a lawsuit on behalf of a Woodbridge, Virginia couple who have been victimized by mortgage rescue scammers that allegedly prey on vulnerable homeowners by targeting Hispanics in Northern Virginia. As a result of the alleged scam, the couple has lost title to their home and thousands of dollars.

The complaint, filed in the United States District Court for the Eastern District of Virginia, alleges that the mortgage rescue scam in this case is operated by Bella Homes LLC (Bella), a Georgia-based company.  As alleged in the complaint, local representatives of Bella specifically targeted the scam to Hispanic people in Northern Virginia, like the Virginia couple, who are Hispanic and for whom English is a second language.  Bella, it is alleged, induced the Virginia couple, who have limited understanding of financial matters, to give the company title to their home for no money; they then entered into a “lease agreement” with Bella whereby the couple paid thousands of dollars to “rent” their home while Bella allegedly worked to purchase their mortgage.  The complaint further alleges Bella did nothing to help the couple avoid foreclosure, and the representations made by Bella to induce the couple into this scheme, including advice that they need not continue making their mortgage payments, were false.  As a result of the scam, the couple has defaulted on their primary mortgage, subjecting them to a risk of foreclosure and of damage to their credit.(Click here to view Complaint)

The targeting of this scam on Hispanics is alleged to violate the anti-discrimination provisions of the Fair Housing Act.  This is one of first cases filed in federal court that alleges a violation of the Fair Housing Act based on a mortgage rescue scam.  In addition, the scam allegations in this case contain many hallmarks identified by federal enforcement agencies as typical of predatory mortgage modification and foreclosure rescue scams.  In fact, the United States Attorney and the state Attorney General in Colorado recently initiated an enforcement action against Bella for similar scamming operations throughout the country.

In the Colorado case, Bella agreed to a preliminary injunction ceasing further operations and transferring approximately $500,000 to the government, pending final resolution of the case or further orders from the court. “Because mortgage rescue scams like this are defrauding homeowners already facing default and foreclosure, it is an especially outrageous practice,” said Lawyers’ Committee Chief Counsel and Senior Deputy Director Jon Greenbaum.  “Targeting these practices to ethnic minorities adds another element to this unconscionable scam.  We hope that this lawsuit will not only help the plaintiffs recover their losses, but also will serve as a deterrent against future scams.” “These types of foreclosure rescue scams violate a number of state and federal laws, including the Fair Housing Act and consumer fraud statutes,” said Megan K. Whyte, Director of the Fair Housing Project at the Washington Lawyers’ Committee.  “The Washington Lawyers’ Committee has long been involved in promoting the rights of immigrants and other protected groups in Virginia and the metropolitan DC area and will continue to assist vulnerable homeowners in asserting their rights.”

Homeowners in need of help with their mortgage should remember that the best help is free.  Homeowners should work with a HUD-approved housing counseling agency and their loan servicer for such assistance. The Lawyers’ Committee has been combating mortgage rescue scamming practices since February 2010 when it launched an initiative called the Loan Modification Scam Prevention Network (LMSPN), and this is the sixth lawsuit filed pursuant to this program.   A major element of the initiative is coordination with federal, state and local law enforcement officials who are fighting these practices, and federal and state law enforcement officials who have initiated the action against Bella in Colorado have been contacted to advance such coordination.  In addition, as part of the LMSPN, the Lawyers’ Committee has created a database to accept complaints of reported or potential scams, and, since its inception, more than 21,000 homeowners nationwide have filed complaints, representing over $60 million in monies lost to such scams.  More informationabout the LMSPN can be found at http://www.preventloanscams.org.  Homeowners who believe that they have been victims of a scam or have information about a scam, or potential scam, are encouraged to report such scams through an online complaint form that can be accessed by clicking the button “Report A Scam!”(Click Here for Bella Homes Fact Sheet)
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The Lawyers’ Committee for Civil Rights Under Law (LCCRUL), a nonpartisan, nonprofit organization, was formed in 1963 at the request of President John F. Kennedy to involve the private bar in providing legal services to address racial discrimination. The principal mission of the Lawyers’ Committee is to secure, through the rule of law, equal justice under law, particularly in the areas of fair housing and fair lending, community development, employment, voting, education and environmental justice.  For more information about the LCCRUL, visit www.lawyerscommittee.org.