After receiving a consumer complaint, Attorney General Peter F. Kilmartin initiated an investigation into the Litwvin Law Firm for allegedly charging homeowners steep up-front fees for mortgage modification services. Through the course of the investigation, it was determined the New York-based law firm was in violation of Rhode Island's Deceptive Trade Practices Act and the Mortgage Foreclosure Consultant Regulation Act. In addition, it was determined the law firm was not licensed to practice in Rhode Island.
As a result of an action filed in Superior Court by Attorney General Kilmartin, Superior Court Associate Justice Luis Matos signed an order that requires Gennady Litvin, individually, and Litvin Law Firm, P.C, as well as its employees and agents, to be enjoined and restrained from doing business in Rhode Island as mortgage foreclosure consultants, soliciting consumers with respect to mortgage modification services and in any way holding themselves out to the general public as mortgage foreclosure consultants, mortgage modification specialists, debt management servicers or any service or business transaction that is referenced in the Mortgage Foreclosure Consultant Registration Act. The Court also ordered that Litvin Law Firm is prohibited from advertising its services in the State of Rhode Island or practicing law unless it is licensed by the Rhode Island Supreme Court.
It was determined through the investigation that consumers initially contacted Freedom Legal Plans or Consumer Legal Plans, companies that heavily advertise promises of saving homes from foreclosure. Once consumers contracted with these entities and paid thousands of dollars in up-front fees, the work would be farmed out to Litvin Law Firm and other law firms across the country. Litvin referred to itself as a "national law firm with local attorneys in your state." Litvin was not licensed to operate as an attorney or a licensed mortgage foreclosure consultant in the state of Rhode Island.
"Out of state attorneys who are not licensed by the Rhode Island Bar Association should not be allowed to profit from homeowners who are struggling to stay in their homes. The promise of a mortgage modification may be no more than a promise and that's why no one should charge an up-front fee in violation of Rhode Island laws," said Attorney General Kilmartin. "For homeowners struggling to pay their mortgage, there is free assistance from Rhode Island Housing and other HUD-certified loan counseling agencies based here in Rhode Island. There is no need to pay thousands of dollars in up- front fees to companies that promise help but provide little or no real assistance other than draining your finances."
Under the terms of the settlement, Litvin agreed to pay in excess of $8,000 in restitution to the consumer complainant and to cooperate with the Office of Attorney General in relation to any future complaints.
In Rhode Island, under the Mortgage Foreclosure Consultant Registration Act it is illegal for companies to charge any fees for foreclosure assistance until consumers receive all the services for which they contract. In addition, there are numerous local community organizations that provide free, HUD-certified loan counseling and mortgage modification assistance.
If you are a homeowner and believe you have been a victim of a fraudulent mortgage modification individual or company, please contact the Consumer Protection Unit of the Rhode Island Office of Attorney General at 401-274-4400 or by visiting www.riag.ri.gov.
About the Office of the Attorney General Consumer Protection Unit The Office of the Attorney General Consumer Protection Unit investigates and mediates consumer complaints concerning unfair and unlawful business practices and misleading advertising arising out of alleged violations of the Deceptive Trade Practices Act. If groups of people are victimized by a deceptive trade practice, this office may file in the Superior Court a civil investigative demand, which is a formal investigation. In appropriate cases, a lawsuit to stop the illegal business practice may be initiated.
Apart from carrying out its statutory responsibilities, the Unit also provides information and referral services to the general public. Consumers are directed to the appropriate governmental or private agencies for help in answering specialized questions or resolving disputes that are not within the Unit's jurisdiction.
The Consumer Protection Unit is available to speak to community groups on how to prevent being a victim of identity theft and other scams. For more information, please visit www.riag.ri.gov or call 401-274-4400.