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State is Facing Difficulties to Rein in Foreclosure Rescue Scam Firms

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By : Karen Anne    99 or more times read
With the increase in foreclosures in Massachusetts there has been a corresponding increase in rescue scam firms. The accountant general Martha Coakley has filed lawsuit against David Zak for particularly targeting Latino homeowner’s facing foreclosure problems. The state is facing difficulties particularly with those rescue firms operated by lawyers.

In the complaint against Zak filed in Superior Court of Suffolk, it was alleged that Zak advertised his rescue schemes in Spanish on the radio and television. He falsely claimed to be able to reduce the mortgage payments by nearly half. As upfront fees that were unlawful, Zak had charged $4,000 to $8,000; over 1,000 troubled house owners of New England had fallen into his trap.

In 2007 the state had promulgated a rule that banned acceptance of advance charges in “foreclosure-related services”. Coakley has advised that house owners seeking help should contact the lenders directly or get in touch with non-profit groups who give these services without taking any fees.

Thirty four year old Zak said that the regulation permits lawyers to take upfront fees for some kinds of legal work – filing for bankruptcy or court measures to fight foreclosure suit.

He contended that his work in mortgage cases are all legal like dispatching demand letters to the lenders in which mortgage violations are pointed out. This way it was hoped that the lenders would be more amenable for negotiation talks that could ultimately be followed up by court action.

In the particular case of Marlon Hernandez, that has raked up dust, Hernandez failed to prove that his earnings were sufficient to make him eligible for loan modification; moreover Zak always made his clients sign a paper indicating that they understood he could not guarantee any results.

Zak called the allegations made by Hernandez and Coakley as totally unfair. He said, “They want to disrupt my practice to the point we can’t function. I am one of the only lawyers who has reached to this community in deep need of this kind of help”.

Last April nearly one dozen demonstrators that included former customers and activists gathered in front of Zak’s office in Revere chanting slogans. Zak said that his unhappy clients were focusing their rage in the wrong direction; he contended that non-profit bodies and other attorneys who were his competitors in business were trying to derail him.

The interests of some non-profit like Chelsea Collaborative and Greater Boston Legal Service are direct collision course with his as they too provide help to troubled homeowners from the low income group.
Karen Anne, has been working on studying the foreclosures market, helping buyers on the finer points of foreclosures. Try to visit and search foreclosures for sale.

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