he Law Foundation, Lawyers’ Committee, and Orrick File Suit Against Mortgage Scam Scheme
CALIFORNIA HOMEOWNERS FIGHT BACK AGAINST ALLEGED LOAN MODIFICATION SCAM CONSPIRACY
SAN JOSE, CA – June 9, 2011 – (RealEstateRama) — The Law Foundation of Silicon Valley (the Law Foundation), the Lawyers’ Committee for Civil Rights Under Law (Lawyers’ Committee), and pro bono counsel Orrick, Herrington & Sutcliffe LLP (Orrick) filed a class action lawsuit on behalf of California homeowners who have been victimized by a network of scam artists preying on vulnerable homeowners. As a result of this alleged loan modification scam, the victims have lost hundreds of thousands of dollars.
The complaint alleges that the loan modification scam or scheme in this case is operated by multiple defendants, including Ken Nathanson, his law firm, Sherman & Nathanson PC, and his successor law firm, Nathanson Law Center, and an alleged sham corporation called RewireMyLoan.com, which is operated by defendant Adeel Amin who is the president of defendant American Brother Corporation. RewireMyLoan.com allegedly funneled vulnerable homeowners to Mr. Nathanson, who was supposed to provide outsized loan modification results using his skills as an attorney, but would deliver essentially nothing.
More specifically, the complaint alleges that the named defendants used their professional standing and ties to the local community to entice vulnerable homeowners, many of whom were facing foreclosure on their homes, into paying as much as $4,995.00 for promised loan modification and loan audit services, backed by a “100% money back guarantee,” but then performed little or none of the promised services. In addition, neither RewireMyLoan nor Mr. Nathanson allegedly refunded the homeowner’s money paid for their services. Plaintiffs further assert that at least ninety homeowners were victimized by the alleged mortgage scheme. The case, filed in Superior Court of Santa Clara County as Ocegueda v. Nathanson, seeks to recover upfront fees paid and damages, and to permanently enjoin the deceptive practices of the named defendants.
“The housing crisis has been devastating for many Californians,” said Kyra Kazantzis, directing attorney of Fair Housing Law Project. “The individuals who ran this scam operation led people desperate to save their homes from foreclosure to believe that they could be trusted, but instead charged them thousands of dollars for doing nothing.”
“These for-profit loan modification operations are making a bad situation worse,” said Lawyers’ Committee Chief Counsel and Senior Deputy Director Jon Greenbaum. “Vulnerable homeowners come in contact with someone posing as an expert and offering to help them negotiate better mortgage terms. Little do they know it’s a scam. We hope that this lawsuit will not only help victims recover their losses, but also will serve as a deterrent against future scams.”
“Through this lawsuit, we’re seeking an immediate halt to the exploitation of desperate and struggling homeowners, and to deliver a measure of justice that these victims have been denied,” said Orrick partner Elizabeth Howard. “Orrick has always been deeply committed to helping those in need, and we appreciate the opportunity to work side-by-side with important legal community organizations to ensure that the victims have access to remedies through the legal system.”
California has been and continues to be the state hardest hit by the foreclosure crisis. According to RealtyTrac, as of April 2011, 1 in every 240 California housing units was in foreclosure, about 2.5 times greater than the national average. California also leads the nation in homeowner complaints about loan modification scams, as scammers are attracted to the state due to its high foreclosure rates and mortgage delinquency. Latino homeowners have been hit especially hard by these modification schemes and make up over 40 percent of all those in or facing foreclosure.
Since the launch of the Lawyers’ Committee’s Loan Modification Scam Prevention Network database in February 2010, more than 14,600 homeowners nationwide have reported scams or potential scams, totaling over 37 million in lost money. More than 3,000 of these complaints come from California. Homeowners in California have lost over 11 million dollars in mortgage modification fees paid to alleged scammers.
Homeowners who would like to report a complaint against the individuals or entities named as defendants in this case should email ">
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The Law Foundation of Silicon Valley’s mission is to secure justice and protect human rights by providing legal advocacy, counseling and access to the legal system for those who would otherwise be underrepresented.
The Lawyers’ Committee for Civil Rights Under Law (LCCRUL), 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, particularly in the areas of fair housing and fair lending, community development, employment; voting; education and environmental justice. For more information about the LCCRUL, visit www.lawyerscommittee.org.
Since its beginning in San Francisco in 1863, Orrick has dedicated itself to two interdependent goals: serving its clients and building an enduring institution. Today, the firm has more than 1,100 lawyers in 23 offices worldwide working together to pursue these objectives. Orrick’s pro bono program features matters ranging from transactional work for nonprofits, to cases for individuals, to impact litigation, to nonprofit organizations serving underdeveloped countries and the people living there.
Contacts:
Law Foundation of Silicon Valley:
Kim Pederson, Senior Attorney, Fair Housing Law Project
408-280-2467, office
Lawyers’ Committee for Civil Rights Under Law:
Stacie B. Royster, Director of Communications
202-662-8317, office
Orrick, Herrington & Sutcliffe LLP:
Sid Venkatesan, Senior Associate
650-614-7456, office
