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Lawyers’ Committee & Davis Polk File Fourth Suit Targeting Loan Modification Scam in Nassau County

NEW YORK, NY – March 15, 2012 – (RealEstateRama) — The Lawyers’ Committee for Civil Rights Under Law (Lawyers’ Committee) and pro bono counsel Davis Polk & Wardwell LLP (Davis Polk) have filed their fourth lawsuit against a network of for-profit loan modification companies. The suit, Masheyeva v. Law Offices of David M. Green, was filed in New York Supreme Court in Nassau County, on behalf of 18 homeowners from New York and six other states. It alleges that the loan modification scam, operated by multiple corporate and individual defendants centered around David M. Green and his Nassau County-based firm, Law Offices of David M. Green, defrauded vulnerable homeowners out of tens of thousands of dollars by falsely promising—for substantial upfront fees—to obtain much-needed mortgage modifications on their behalf, but then consistently failing to deliver results. The case seeks to recover monetary damages, including the illegal upfront fees paid by plaintiffs, and injunctive relief to put an end to the deceptive practices of the named defendants. The Lawyers’ Committee and Davis Polk are representing the plaintiffs free of charge. (Click here to view Complaint)

The scheme at issue in this case is alleged in the complaint to have operated as follows:

In exchange for sizable advance fees of up to $5,000, collected in violation of New York law, defendants promised to work directly with plaintiffs’ lenders to renegotiate their home loans and to secure lower monthly payments and interest rates, and, in some instances, avoid impending foreclosure.
They lured plaintiffs by touting their specialized experience in the industry, offering the services and expertise of seasoned attorneys, and claiming to have personal connections with key employees of plaintiffs’ lenders.
Ultimately, defendants performed little to no work on plaintiffs’ loan modification applications, typically failing to make any contact with their lenders.

“The impact of this type of scam activity on financially distressed homeowners has proven devastating,” said Jon Greenbaum, Lawyers’ Committee chief counsel and senior deputy director. “Not only are homeowners being defrauded out of thousands of dollars, but they ultimately sustain a variety of other losses, including late fees and damage to credit scores and, in the worst cases, are brought closer to the brink of foreclosure as a direct result of the scam.”

Masheyeva v. Law Offices of David Green is the Lawyers’ Committee’s sixth loan modification scam lawsuit filed nationally part of the Lawyers’ Committee’s work with the Loan Modification Scam Prevention Network (LMSPN) litigation effort seeks to put an end to the fraudulent and deceptive behavior of so-called loan modification “specialists. LMSPN is a broad coalition that also includes representatives from key governmental agencies, the Federal Trade Commission, the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Justice, the U.S. Department of the Treasury, the Federal Bureau of Investigation, and the offices of numerous state Attorneys General. Since the launch of the national LMSPN database in February 2010, more than 21,000 homeowners nationwide have filed complaints regarding scams or potential scams, representing over $60 million in monies lost to such scams. More than 1,100 of these reports have been submitted by New York homeowners, who have reported losses of over $4 million in fees paid to alleged loan modification scammers.

Homeowners who believe they have been victims of a scam or have information about a scam, or potential scam, are encouraged to report such scams either by calling 311 in New York City or by entering such information online at: and clicking the button “Report a Scam!”

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The Lawyers’ Committee for Civil Rights Under Law, a nonpartisan, nonprofit organization, was formed in 1963 at the request of President John F. Kennedy to involve the private bar in providing legal services to address racial discrimination. The principal mission of the Lawyers’ Committee is to secure, through the rule of law, equal justice under law.

For over 160 years, the lawyers of Davis Polk & Wardwell LLP have advised industry-leading companies and global financial institutions on their most challenging legal and business matters. The firm has a long and distinguished history of providing pro bono legal services to those who could not otherwise obtain legal representation and views pro bono work as a central responsibility of the firm its lawyers. For more information:

Category: News || Laws & Taxes



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