By Keith Griffin
The State Law Group, the California law firm at the heart of a burgeoning mortgage modification aid scam targeting non-English speakers, has been told by the CT Department of Banking to temporarily cease and desist from doing business here with the intent of permanently shutting them down in Connecticut.
Carmine Costa, director of the banking department’s consumer credit division, told CTLatinoNews his department has issued a temporary cease and desist order with the intent to impose a permanent cease and desist and seek civil penalties. “We’ve alleged certain violations of our laws and we have ordered them to stop violating our laws,” he said.
State Law Group, based in Santa Ana, Calif., is accused of defrauding New Britain homeowner Ramon Lopez of more than $5000 to help him modify a mortgage with Wells Fargo Bank. The law firm allegedly took the money and then did nothing to modify his mortgage. The bank foreclosed on Lopez’s but a sympathetic judge stayed that foreclosure last week until Aug. 27.
The law firm stands accused of illegally practicing mortgage modification assistance in Connecticut where it is not currently licensed. The State Law Group also allegedly charged fees 10 times in excess of what state law allows. “It’s completely egregious,” Costa said.
The state’s complaint specifically targets an attorney associated with the firm named Jaben Hapte Tesfai. There is no attorney listed by that name in California but there is an inactive attorney named Haben Hapte Tesfai. According to the California Bar Association, he has been inactive since Feb. 1, 2012. The bar association website lists no disciplinary action against Tesfai.
In addition to shutting down the predatory law firm, the state also wants to get victims’ money back. “It’s our hope that we can get [Lopez] a refund … and other Connecticut residents that we are aware of,” Costa said, adding that it knows of at least 10 consumers who are owed money, including Lopez, who was on a list of clients provided to the banking department by State Law Group. “We have not had further consumer complaints brought to our attention,” Costa added.
Kathleen Titsworth, a banking education coordinator, said consumers who have been victimized by the State Law Group should call the state’s foreclosure assistance line at 877-472-8313. That same phone number can also be used by any resident in need of foreclosure assistance.
The banking department took official action after talks with the State Law Group broke down. Previously, the law firm had agreed to refunds of clients’ money. Now it faces a tentative Sept. 19 hearing before a banking department hearing officer. At this point the CT Attorney General’s office is not involved but could be if the banking department determines the State Law Group continues to practice in Connecticut during the temporary cease and desist order.
Costa conceded that it is possible for the law firm to shut its doors and resume under another name. The value, he said, is the state maintains records online for 10 year that will name the State Law Group and Tesfai.
“The real benefit is to get the word out to consumers,” Costa said. “They need not to be sending thousands of dollars to people who are going to help them with their mortgages.” State law says mortgage modification firms can only charge $500.
