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Post date: June 23 2010

Attorney General Cuomo Orders Mortgage Rescue Companies To Cease Fraudulent Practices Against Homeowners

NEW YORK, NY (June 23, 2010) - Attorney General Andrew M. Cuomo today announced that his office is sending over 180 cease-and-desist letters to mortgage rescue companies with customers in New York, warning them to immediately end all misleading and illegal conduct. The Attorney General’s ongoing investigation into the mortgage rescue industry revealed that many companies routinely collect illegal up-front fees from homeowners on the brink of foreclosure and then fail to help them lower their mortgage payments or save their home as promised. Thousands of New Yorkers have been affected by mortgage rescue scams.

Mortgage rescue companies target homeowners facing foreclosure by claiming to be able to modify home mortgage loans and lower monthly payments. Often, these companies engage in deceptive and illegal marketing practices to lure customers and then fall short on their promises. After using a mortgage rescue company, homeowners can find themselves in worsened financial circumstances and at greater risk of losing their homes.

“Today, we are putting mortgage rescue companies on notice - they must immediately cease any dishonest tactics used to prey on homeowners or they will face the consequences,” said Attorney General Cuomo. “The business model for many mortgage rescue companies is based on false promises, but the true cost of their deception is all too real. When faced with the threat of foreclosure, New Yorkers should remember the rights they have as homeowners and the protections that my office ensures.”

The Attorney General’s cease-and-desist letters - which are going to 182 companies - warn mortgage rescue companies to end any illegal, deceptive, and misleading practices, including:

  • Charging up-front fees for consulting services;
  • Failing to enter into written contracts with homeowners, in the language the homeowners use, that fully disclose the exact nature of, and fees for, the services to be provided;
  • Failing to allow homeowners to cancel their contract, without any penalty, within five business days after signing and failing to provide homeowners with notice of this right in the contract;
  • Using any deceptive and misleading advertising practices, including: false guarantees regarding success rates, false 100% money-back guarantees, and fabricated consumer testimonials;
  • Using any advertisements designed to give consumers the false impression that a company is affiliated with the government or a government-sponsored program.

A copy of the Attorney General’s cease-and-desist letter can be found at the website also contains useful information about recognizing and avoiding mortgage rescue scams, important facts about the foreclosure process, and a list of reputable resources that can provide free mortgage rescue help to homeowners facing foreclosure.

The foreclosure crisis has claimed the homes of thousands of New Yorkers across the state. As of May 2010, there are 64,778 foreclosed properties in New York, and 1 in every 1,982 housing units had received notice of foreclosure.


Attorney General Cuomo is committed to aggressively enforcing the law against mortgage rescue companies that engage in illegal conduct and take advantage of homeowners facing possible foreclosure.

Some of the Attorney General’s actions in his ongoing investigation of the mortgage rescue industry include:

  • In August 2009, Cuomo’s office filed a lawsuit against American Modification Agency, Inc. (“Amerimod”), formerly one of the largest mortgage rescue companies in the country, and its owner and president Salvatore Pane, Jr. The Attorney General’s investigation revealed that Amerimod routinely collected illegal up-front fees from homeowners on the brink of foreclosure and then failed to modify their home mortgage loans and lower their monthly mortgage payments. In April 2010, the New York Supreme Court issued a favorable decision in the case, holding Pane personally liable for engaging in fraudulent and illegal acts, continuing a freeze on Amerimod’s assets, and ordering further proceedings to determine the amount of consumer restitution, costs, and penalties. Pane is currently serving time in jail on an unrelated conviction.
  • In March 2010, Cuomo sued Infinity Mitigation Services and its principals for illegally charging homeowners for loan modification services that were not performed. In June 2010, the Attorney General’s office obtained an order and default judgment from the New York Supreme Court shutting down the company, freezing their assets, and ordering them to pay a judgment in the amount of $8.8 million.
  • In March 2010, Cuomo announced settlements shutting down two mortgage rescue companies: Ronkonkoma-based ABM Mitigation Corporation (“ABM”) and Florida-based Raymond, Louis & Fitch (“RLF”). As part of the settlements, ABM agreed to shut down their practices nationwide and RLF agreed to stop doing business in New York State. The companies also agreed to refund fees to all customers who have not obtained a loan modification.
  • In May 2010, Cuomo’s office entered into a settlement with Global Modifications Services, Inc. and its principal. Under that settlement, the company and its principal agreed to pay restitution to homeowners who were charged illegal up-front fees.


Under the law in New York, mortgage rescue companies are required to provide clients with contracts, notify financially vulnerable homeowners that there are non-profit counselors that can help them for free, and in most cases refrain from charging up-front fees.

Homeowners who are unable to make their mortgage payments should call their lender immediately to discuss the available alternatives to foreclosure. Many lenders offer foreclosure avoidance programs and have pledged publicly to assist distressed borrowers. To find counselors approved by the U.S. Department of Housing and Urban Development in your local area, call 800-569-4287 or visit To obtain foreclosure assistance or contact your mortgage lender, call the Federal Housing Administration at 800-CALL-FHA or visit

Consumers who believe they are being targeted or defrauded by a mortgage rescue company that may be engaging in unlawful conduct are urged to contact the Attorney General’s Office at 800-771-7755.

The Attorney General’s investigation into mortgage rescue companies is being handled by the office’s Consumer Frauds and Protection Bureau, Civil Rights Bureau, and several of the Attorney General’s Regional Offices across the state.

The cease and desist letters announced today, as well as the Amerimod, Raymond Louis Fitch, and Global Modification cases, are being handled by Special Counsel to the Consumer Frauds and Protection Bureau Mary Alestra, Assistant Attorneys General Stephanie Sheehan, Brian Montgomery, and Laura Levine, and Deputy Chief of the Consumer Frauds and Protection Bureau Jeffrey Powell, under the supervision of Chief of the Consumer Frauds and Protection Bureau Joy Feigenbaum. The Infinity and ABM cases are being handled by Special Deputy Attorney General for Civil Rights Alphonso B. David and Chief Counsel for Civil Rights Spencer Freedman.