Lawyers’ Committee Files Fifth California Lawsuit Against Loan Modification Scam Network


WASHINGTON, D.C. – May 22, 2013 – (RealEstateRama) — The Lawyers’ Committee for Civil Rights Under Law (Lawyers’ Committee)has filed a lawsuit in Los Angeles County, California against a network of for-profit loan modification companies on behalf of eight California homeowners.  The suit alleges that defendants defrauded vulnerable homeowners out of tens of thousands of dollars by falsely promising to obtain—for substantial upfront fees—much-needed mortgage modifications on the homeowners’ behalf, but consistently failing to deliver results. Attorneys in the Los Angeles office of Arnold & Porter LLP are providing pro bono counsel on the case.

The complaint alleges that, in exchange for sizable advance fees of up to nearly $3,700 collected in violation of California law, defendants promised to work directly with plaintiffs’ lenders to renegotiate their home loans and to secure lower monthly payments and interest rates.  The complaint further alleges that defendants lured plaintiffs by touting their specialized experience in the industry, claiming success rates of 90% or higher and promising a refund of all or most of the fees paid if defendants did not obtain loan modifications for plaintiffs.  Ultimately, defendants performed little to no work on plaintiffs’ loan modification applications, in some cases failing to make any contact with their lenders, and in all cases failing to fulfill the set of promises they made to plaintiffs, according to the complaint allegations.  After working with defendants for months, not a single plaintiff received a refund, despite defendants’ oral and written refund guarantees, it is alleged.  As a result of working with defendants, many plaintiffs were pushed further into financial distress and came closer to losing their homes.

“The Lawyers’ Committee and our pro bono co-counsel continue our private enforcement efforts to put a stop to scamming operations preying upon distressed homeowners.  This is our seventh lawsuit nationwide, third in California, alleging attorney involvement in such unlawful schemes,” said Linda Mullenbach, senior counsel for the Fair Housing and Fair Lending Project of the Lawyers’ Committee.  “These scamming activities have a devastating effect on vulnerable homeowners who are seeking solutions and, instead, find themselves at a greater risk or foreclosure and in greater financial peril as a result of the deceptive and unlawful conduct.”

”Arnold and Porter is pleased to work with the Lawyers’ Committee on this case,” said Ronald Johnston, a senior litigation partner at Arnold & Porter.  “Our firm has an extensive history handling pro bono matters in a wide range of areas.”

The complaint alleges that the loan modification scam in this case is operated by multiple corporate and individual defendants, led by California attorney Jerry A. Stevenson and former mortgage broker David Gomez.  The key corporate defendants named are California-based entities Platinum Law Group, Inc., Platinum Law Center, Priority Realty Group, Priority Mortgage Group, Inc., Priority Financial Group, and LaBrea Group LLC.  The case, Baker, et al. v. Platinum Law Group, et al., was filed in California Superior Court in Los Angeles County and seeks monetary damages, including those related to the illegal upfront fees paid by plaintiffs, and injunctive relief to put a halt to the deceptive practices of the named defendants.  [Click Here to View Complaint]

Baker v. Platinum Law Group is the Lawyers’ Committee’s fourteenth loan modification scam lawsuit filed nationwide and its fifth filed in California.  As part of the Lawyers’ Committee’s work with the Loan Modification Scam Prevention Network (LMSPN), this litigation effort has sought to put an end to the fraudulent and deceptive behavior of so-called loan modification “specialists” in California, Florida, Georgia and New York.  LMSPN is a broad coalition that also includes representatives from key governmental agencies, such as 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 March 2010 through April 30, 2013, more than 32,000 homeowners nationwide have reported loan modification scams or potential scams that have resulted in total losses of over $78 million.  Approximately 6,300 of these reports have been submitted by California homeowners, who have reported losses of over $22 million in fees paid to alleged loan modification scammers.

Homeowners who believe they have been victims of a scam are encouraged to call 888-995-HOPE (4673) or visit and click the “Report a Scam!” link.

Read more about our loan modification scam litigation here:

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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. We are celebrating our 50th anniversary in 2013 as we continue our quest of “Moving America Toward Justice.” 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

Arnold & Porter LLP is an international law firm of over 800 lawyers with offices in Los Angeles, Brussels, Denver, London, New York, Northern Virginia, San Francisco, Silicon Valley, and Washington, D. C.  The firm, founded in 1946, maintains more than 26 practice areas spanning a broad spectrum of the law, with a primary focus on litigation, transactional matters, and regulatory issues.

Stacie B. Royster
Director of Communications and External Affairs
Lawyers’ Committee for Civil Rights Under Law
Telephone: (202) 662-8317

Deborah E.Douglas
Regional Marketing Director
Arnold & Porter LLP
Telephone: (415) 471-3238

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