Report from the Arizona Attorney General’s Office: PHOENIX (Friday, September 07, 2012) — Arizona Attorney General Tom Horne has reached a settlement with The Mortgage Law Group a/k/a Macey Aleman & Searns, a Chicago-based law firm that the State accused, in a consumer fraud lawsuit, of participating in a deceptive scheme designed to collect advance fees from consumers looking for assistance in obtaining mortgage loan modifications. In nearly all cases, it is illegal for businesses to charge consumers upfront fees for loan modifications.

According to Arizona Attorney General Mortgage Law Group targeted an especially vulnerable group of consumers – borrowers facing possible foreclosure.


“Lawyers should be especially careful to avoid misrepresentations to consumers and to follow laws regulating mortgage loan modifications,” said Horne. “In this case, Mortgage Law Group targeted an especially vulnerable group of consumers – borrowers facing possible foreclosure.”

The State alleged that, along with co-defendant, Scottsdale, Arizona- based Underwater Property Solutions, The Mortgage Law Group (“TMLG”) marketed mortgage modification services to consumers as legal services that they represented would be performed by TMLG’s attorneys, including local “partners” in the states where TMLG’s clients resided. The State alleged that Underwater Property Solutions’ non-lawyer employees did nearly all of the substantive work for consumers who paid “retainer fees” to TMLG. The State also alleged that Underwater Property Solutions, acting on behalf of TMLG, misrepresented:
•    that TMLG could stop foreclosures;
•    that consumers were guaranteed a modification if they hired TMLG, and;
•    that consumers would save hundreds of dollars a month with their modifications, when the representations were nothing more than speculation and often proved to be false.
The settlement permanently prohibits TMLG from engaging in any consumer debt or loan modification activities in Arizona or on behalf of Arizona consumers and requires TMLG to pay $39,280 in restitution and $60,000 in attorney’s fees. In entering into the settlement with the State, TMLG did not admit that it violated the law nor did the court make findings that it did so. A consent judgment with co-defendant Underwater Property Solutions was approved in May, 2012.

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MUSINGS BY DIANE: “As an attorney I am disgusted that any fellow attorney would prey anyone, especially on innocent homeowners in their time of need.  I can only hope that these attorneys will lose their licenses to practice law.  Lastly, I pray that they will face similar abuse that they suffered on their clients.  I wish the homeowners they scammed could be there to see their pain!!!”

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Diane L. Drain

Diane L. Drain, bankruptcy attorney, retired law professor, mentor and community spokesperson.

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