New Jersey Attorney General Paula T. Dow announced today that the owner of several New Jersey loan modification companies has agreed to pay the state $805,000 and stay out of the foreclosure rescue business to resolve allegations he defrauded struggling homeowners who sought help in staving off foreclosure.
Defendant Stephen Pasch of Greenbrook Township, Somerset County, agreed to a judgment of $805,000 -- $205,000 of it payable to the Division of Consumer Affairs within 60 days – to settle charges that his New Day Financial Solutions, Inc. and other companies collected up-front fees from homeowners in return for promised mortgage modification help – a prohibited practice in New Jersey. Pasch’s other companies include American Credit Repair and Settlement, NDROA Inc. and Paramount Debt Settlement USA.
In addition to Pasch, another defendant in the same lawsuit, licensed attorney Ejike N. Uzor of Newark, has settled claims against him for $25,000. Two Uzor companies were also corporate defendants in the state suit: Uzor Financial Solutions and Ejike N. Uzor and Associates.
In most cases, the foreclosure rescue services for which homeowners paid Pasch and Uzor up front never materialized or actually made their situations worse. In addition, the state’s lawsuit charged that a Pasch/Uzor “non-profit” known as American Financial Advocacy Council – through its Web site at www.lordsavemyhome.com – fraudulently sought to instill consumer confidence in the defendants’ profit-making operations
“This case is another example of our commitment to fighting deceptive practices in the mortgage business and related industries, such as loan modification, and to holding accountable those who mislead vulnerable homeowners,” said Attorney General Dow. “Simply put, these companies exploited people who looked to them for hope and paid them for help. This type of activity is reprehensible anytime, but particularly during tough economic times,” said Dow.
The settlement announced today resolves allegations that Pasch and his companies misled consumers through false advertising and deceptive solicitations in violation of New Jersey’s Consumer Fraud Act, and engaged in debt adjustment activity without a license in violation of the New Jersey Debt Adjustment and Credit Counseling Act and the federal Credit Repair Organizations Act.
The defendants’ settlement payments will be used to provide restitution of up-front fees paid by consumers. The Division of Consumer Affairs has reached out to homeowners who filed complaints about Pasch and Uzor with information about the restitution fund, and what they need to do to collect their payments.
The defendants have ceased operating their loan modification business. Under the settlement, they have agreed to a permanent ban on participating in, or soliciting consumers for, any business related to loan modification, debt adjustment or credit repair.
Acting Division of Consumer Affairs Director Thomas R. Calcagni said homeowners in mortgage trouble need to know the warning signs of a potential scam.
“Legitimate assistance is available to help homeowners avoid mortgage default and potential foreclosure, Calgani said. “But consumers should beware, and report to the Division of Consumer Affairs, anyone who charges an up-front fee for mortgage modification assistance.”
Other warning signs include being told not to contact your lender directly and to deal only through the supposed mortgage assistance company.
Garces & Grabler would like to advise individuals to be extremely careful when seeking help with mortgage or loan modification, foreclosure help and bankruptcy help.
Please see our post on how to avoid foreclosure scams.
Information about Mortgage Modification.
Contact an attorney for help with your foreclosure, mortgage modification, or bankruptcy.
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