State Attorney General Eric Schneiderman is suing two Great Neck residents and their mortgage consulting firm, alleging that they used the company to defraud financially struggling homeowners, according to court documents.
The lawsuit, which was filed on Aug. 22 in New York County Supreme Court, alleges that Javier Gutierrez and Shadi Soumekh, president and secretary, respectively, of Farmingdale-based Home Affordable Direct Inc., “engaged in an ongoing unlawful mortgage relief scheme” that illegally charged homeowners “substantial advance fees.”
Schneiderman said Soumekh “has control” over the company’s finances and is “actively involved in [the company’s] day-to-day operations” and that Gutierrez created commercials that misrepresented the company.
Efforts to reach both Soumekh and Guttierrez for comments on the lawsuit were unavailing.
The two sides are expected in court on Sept. 11, according to the court website.
The company allegedly asked homeowners to apply for a mortgage modification through its website, or by calling a salesperson.
The company, which in its advertisements promises that their services are free, then charges homeowners “substantial fees” before a written agreement is reached between the homeowner and the company, according to the lawsuit.
Schneiderman said in the lawsuit that no mortgage assistance company is allowed to receive a fee for its services until a written agreement is reached between both parties.
He also alleges that the company engaged in “numerous misrepresentations” through advertisements, created by Gutierrez, falsely promising consumers that they would pre-qualify for a mortgage modification and that “stopping foreclosure…is an entirely possible process.”
The company, Schneiderman said, falsely stated that it has been in “the home preservation business for 12 years,” when it has only been incorporated in the state since May, 7 2013.
The company also allegedly misrepresented that it has an “excellent reputation.” Schneiderman says that the company was given an “F” rating by the Better Business Bureau and that the Connecticut Department of Banking has issued a temporary cease and desist order for violating Connecticut state law.
The lawsuit also alleges that homeowners were only given a refund if they spoke to Guttierrez, who routinely ignored and did not return phone calls from customers.
JR Holding Group Corp. and Clear Solutions and Settlements Inc., two mortgage consulting companies of which Somuekh and Gutierrez are principal owners of, are also listed as defendants in the lawsuit.