Cuomo brings foreclosure fraud fight to Elmont

Though the state’s struggle to close its huge budget gap is dominating the headlines, another economy-related issue is likely to loom large in the near future: foreclosures.

Predatory lending and home foreclosures are still huge issues in New York, in particular in New York City and on Long Island. But those are just two parts of a three-part assault on homeowners in the area. As more and more families have defaulted on their mortgages, a new kind of scam has been on the rise: false foreclosure rescues.

Unscrupulous loan-modification companies claim they can renegotiate the terms of mortgages and instruct homeowners in ways to protect their biggest investment. All too often, experts say, these companies are just preying on people who find themselves in a desperate situation.

Now state Attorney General Andrew Cuomo has chosen Elmont as the staging ground from which to strike a blow for homeowners’ rights in the battle against foreclosures. In a conference room at the Elmont library on March 25, Cuomo and members of his staff announced that they are suing two loan-modification companies based on Long Island for their participation in foreclosure rescue fraud.

“As New Yorkers and others across the country fight to stay afloat in these tough times, we continue to see dishonest companies preying on vulnerable homeowners,” Cuomo said. “These companies pretend to be reaching out a helping hand, but instead they push consumers further down into debt, and in some cases into foreclosure.”

Cuomo illustrated his point with the foreclosure numbers for the counties on Long Island, including Brooklyn and Queens, for January alone. They totaled more than 2,600, with more than 500 in Nassau County.

“This problem — I would like to say that it’s waning, or it’s getting better, but it’s really not. In some ways it’s actually getting worse,” Cuomo said. “We talk all the time about the economic crisis, [but] more and more the economic meltdown is becoming a housing crisis [and] more and more the victims of this fiscal crisis are not financial people, they’re homeowners. They’re people who’ve seen the equity in their home disappear, and the value in their home plummet.”

In very few places on Long Island has this truth been more apparent than in Elmont. According to statistics from Cuomo’s office, one out of every 1,000 homes in Elmont received a foreclosure notice in February. Even more jarring is the fact that nearly 20 percent of all homes currently for sale in Elmont have been foreclosed on.

Cuomo said it was those numbers in particular that led him to make his announcement in Elmont. “This [area has] one of the highest foreclosure rates on the Island,” he said. “The people who fall prey to these scams are people who are in foreclosure or people who have a problem with their mortgage, and this community falls within that category.”

The two companies against which Cuomo has filed suit are National Modification Service, in Farmingdale, and Infinity Mitigation Corporation, in Bohemia. Cuomo said that these two companies are examples of the worst of society, taking advantage of those in financially perilous situations by promising to help them fight for their homes, then taking thousands of dollars in payments and disappearing.

“It’s always shocked me how, whenever you have a crisis, it seems you have people and companies who will prey on the crisis,” Cuomo said. “They prey on the desperation of individuals. They prey on people who are desperate and have no place to turn.”

One victim of National Modification Service, Barbara Weaver, of Freeport, said that after giving the company what she thought was a refundable $1,200 deposit to prevent her home from being auctioned, she was given the brush-off. “When I went to collect my deposit, National Modification refused to issue me a refund, and even threatened to have me arrested for trespassing,” Weaver said. “I am now in court to try and save my home.” She said it had been less than eight months between the time she retained National Modification’s services and the day her house was to be auctioned.

Cuomo said that communities like Elmont are facing not just a preponderance of efforts to take advantage of homeowners’ desperation, but also a lack of good information about how to safely get out from under crushing mortgage payments. “It’s a process of education,” he said. “I think what happens is that people are scared, people are desperate that they’re going to lose their home, and they see an ad on TV ... they get a leaflet in the mail and the deal sounds so good.”

After announcing the suit, Cuomo urged anyone who might be in danger of foreclosure to seek the help of state-approved loan counselors by calling the U.S. Department of Housing and Urban Development at (800) 569-4287, or visiting the department’s Web site, www.hud.gov. He also encouraged New Yorkers and Elmont residents who believed they had been victims of foreclosure fraud to visit the state’s consumer help site, www.nyprotectyourhome.com, or call (800) 771-7755.

Comments about this story? MHampton@liherald.com or (516) 569-4000 ext. 214.