State gets cease and desist order, restitution from California mortgage loan modification firms

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The Delaware Department of Justice’s Consumer Protection Unit reached a settlement with two California-based companies requiring them to stop advertising and selling mortgage loan modification and debt relief services in Delaware and to provide restitution to Delaware consumers.

In the cease and desist agreement, the state alleged that Roosevelt Law Center, P.C. and Miracles for Homeowners Marketing, Inc., and their principals, Thomas Moore and Benjamin Borazghi, operated a foreclosure rescue scam targeting Delaware homeowners.

Roosevelt and Miracles targeted Delaware homeowners struggling to make their mortgage payments with over 1,000 deceptive flyers and collected thousands of dollars in upfront fees from Delawareans who responded, the state alleged. The “services” purportedly provided by these companies had little or no value, and a number of homeowners ultimately lost their homes to foreclosure, according to the department.

“People who are trying to save their homes are living through a nightmare, often amid other serious hardships,” said Delaware Attorney General Kathy Jennings. “There are real programs that can offer these homeowners hope, including programs within the Department of Justice, but the ugly truth is that many scammers see opportunity in others’ misfortune. My office is here to help homeowners facing foreclosure, and we will not tolerate the despicable scams that prey on our most vulnerable residents.”

Under the agreement, Roosevelt, Miracles, Moore, and Borazghi are required to pay restitution of $22,275 to nine Delaware homeowners, in addition to $70,000 in civil penalties. The agreement also prohibits the companies and their principals from directly or indirectly offering any mortgage loan modification or debt relief services in Delaware in the future.

Common tactics used by foreclosure rescue scammers include “guarantees” to save someone’s home or to secure a loan modification, requests for upfront fees, and misleading statements regarding affiliation with government agencies.

Delaware’s Mortgage Loan Modification Services Act makes it unlawful for a mortgage loan modification service provider to collect fees from a homeowner prior to obtaining a modification from the homeowner’s loan servicer.

Homeowners who wish to report a foreclosure rescue scam should contact CPU at (800) 220-5424. Legitimate foreclosure prevention programs are also available through the state’s Office of Foreclosure Prevention, including Delaware’s Residential Mortgage Foreclosure Mediation Program. More information is available at de.gov/consumer.

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