Home Affordable Direct, a Farmingdale, N.Y., firm, is facing allegations by New York State Attorney General Eric Schneiderman that it defrauded struggling homeowners in a scheme to collect advance fees as part of a home loan modification business. The attorney general, in a petition filed Tuesday in Manhattan Supreme Court, asked the court to block Home Affordable Direct from doing business until it deposits $2 million in escrow, hands over customer files and pays restitution to customers.
On Wednesday, the AG secured a temporary restraining order that bars the company from collecting advance fees unless they accept loan modification agreements and says they cannot operate their business unless they provide disclosures required under federal Mortgage Assistance Relief Services, or MARS, rules. The order also freezes company bank accounts.
“The TRO [temporary restraining order] sought by petitioner is essential to protect the public from further harm and to ensure that funds are available from which to recover restitution for the many consumers victimized by respondents’ deceptive and illegal scheme,” said Assistant Attorney General Adam Cohen in a sworn affidavit. The AG is also asking the court for $5,000 in penalties for each consumer affected by the alleged scheme and to block company officials from transferring any assets.
Officials say the firm has closed four different bank accounts since 2012. – See more at: http://therealdeal.com/blog/2014/08/27/attorney-general-goes-after-ny-loan-modification-firm/#sthash.7jUV4nMx.dpuf