Lawyers exploit foreclosure ‘rescue’ fee loophole

Government decision enriches attorneys, stings homeowners

In 2011, three attorneys set up a firm called The Mortgage Law Group that took advantage of a federal program aimed at helping people threatened with foreclosure to stay in their homes.

Business boomed. In just over two years the Chicago firm signed up more than 5,200 clients who paid more than $18 million in advance fees for legal services they hoped would either reduce the size of their mortgage payments or hold off foreclosure.

But federal regulators say the firm was little more than a sophisticated telemarketing scam that masqueraded as a law practice and cheated thousands of financially vulnerable people.

Most Mortgage Law Group clients received little for their money, according to federal officials, who in a lawsuit filed in 2014 accused the firm of employing misleading and deceptive sales tactics to lure in customers.

Read on.

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