N.J. sues over mortgage-fixing pitches

New Jersey's attorney general has filed civil lawsuits against two Camden County companies accused of preying on homeowners facing foreclosures.

The companies billed themselves as loan-modification services that could negotiate with lenders to prevent foreclosures.

The companies took payments up-front from customers, then did nothing to help them, Attorney General Anne Milgram said yesterday.

"In one way or another, each defendant . . . is charged with selling false hope," she said. "The defendants' conduct is predatory."

The attorney general has also filed a third lawsuit against two North Jersey companies accused of running a multimillion-dollar mortgage-fraud scheme.

All three suits are part of an effort to combat mortgage fraud that has led to eight civil complaints, naming 87 individuals and corporations, since June.

Milgram said criminal charges could follow.

The Camden County companies took names and operated Web sites intended to give the impression that they were affiliated with federal government-sponsored programs like the Hope Now Alliance and Hope for Homeowners, the complaints said.

One company, in Cherry Hill, used the name Hope Now Financial. The second company, in Bellmawr, is called New Hope Modifications.

"These names are not by accident," said Steven Goldman, commissioner of the state Department of Banking and Insurance.

Loan modifications can be negotiated only by licensed debt adjusters, he said. Neither company was licensed to do so, he said.

Fees for loan modifications are capped by law, and both companies charged well beyond what would have been legal, Goldman said.

So far, 23 customers who paid more than $29,000 to Hope Now Financial have filed complaints with the state. Eighty customers who paid more than $98,000 to New Hope have complained.

The victims are from around the country, and some have subsequently seen their homes go into foreclosure, officials said.

"You're dealing with people who are at the end of their ropes," Goldman said. "They're being defrauded out of some of the few dollars they have left."

The New Hope lawsuit also names Donna Fisher and Brian Mammoccio, who live together in Mullica Hill, as defendants. Each has been a registered agent of the company.

Their attorney, Colin Bell, said he had just received the lawsuit, which was filed in Superior Court in Camden on Monday, and he was still reviewing the allegations. But he said he thought the attorney general lacked jurisdiction to bring the suit.

"New Hope is not now doing business with New Jersey residents," he said. "Its conduct at this point appears legal in each of the states where it's doing business."

No individuals were named as defendants in the Hope Now Financial lawsuit, which was filed in the same court Friday. An operator at Hope Now said yesterday that the company had no comment.

The two companies are unrelated, Milgram said.

The third suit named two North Jersey companies run by Martin Gendel, a disbarred lawyer from Montville, and his son, Seth Gendel of New York.

Their companies obtained fraudulent mortgages by duping investors into buying distressed properties, the lawsuit said. The companies promised to fix and maintain the properties, find tenants, and cover the mortgages.

Instead, the attorney general said, investors were left with abandoned, dilapidated homes, which were then foreclosed upon. Investors lost $18 million on 63 properties and saw their credit ratings ruined, she said.

Milgram said her office sought civil lawsuits against the companies because it was the fastest way to get the cases into court.

"You will see criminal mortgage-fraud cases come out of this office in the future," she said.

The state has asked a judge in Camden County to shut down Web sites belonging to Hope Now Financial and New Hope, and a hearing on that request has been scheduled for later this month.

The companies were contacted before lawsuits were filed, Goldman said. They were urged to stop their activities and refund customers' money. He said that some of the money had been refunded, but that the companies had refused to stop doing business.

"Apparently, it's too lucrative to stop unless you have a lawsuit saying you can't," he said.

New Jersey residents seeking to file a complaint can call the state Division of Consumer Affairs at 1-800-242-5846. Out-of-state residents can call 973-504-6200.

Also, homeowners facing foreclosure can get legal help, counseling, and a mediator to help resolve loan delinquencies through a state mediation program. Homeowners can get information at www.NJForeclosureMediation.org or by calling 1-888-989-5277.