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270 people complain they never received help

The state Division of Consumer Affairs has issued violation notices to three companies and their operators who took money from consumers for mortgage modification services without being licensed by the state as legally required.

None of the 270 consumers who have filed complaints were able to get their mortgages modified, Consumer Affairs officials said Friday. The consumers collectively paid $398,059 to the companies.

Consumer Affairs issued the violation notices to the following to:

• Secure Property Solutions and Joseph A. Gembala, III and Associates, formerly located in Barrington; 250 complaints; $364,147
• Fresh Start Home Modifications and Thomas R. Mansell, Jr., formerly located in Woodbury Heights; 19 complaints; $32,811
• Financial Investigators of America and Michael Quellman, formerly located in Red Bank; 1 complaint; $1,100

The notices state that each of the companies and operators violated the state’s Consumer Fraud Act by committing “unconscionable” business practices through not being licensed as debt adjusters by the state.

“The law is clear – debt adjusters must be licensed by the state Department of Banking and Insurance,” Attorney General Jeffrey S. Chiesa said. “We allege that these parties broke the law. We’ve taken action to hold each accountable and to get money returned to the consumers who were deceived.”

In addition to restitution, each of the three companies must pay a $5,000 civil penalty to the state and stop advertising, offering to sell, and selling debt adjustment services. Each has the option to accept the settlement terms or contest the notice at an administrative hearing with the Division of Consumer Affairs.

“Homeowners working to keep their residences are often put into a worse situation by unlicensed companies offering mortgage modification assistance,” Consumer Affairs Director Thomas R. Calcagni said. “In this difficult financial climate, with so much at stake for struggling homeowners, our Financial Fraud Section has substantially intensified its enforcement efforts against these often fly-by-night mortgage modification outfits – shutting them down whenever possible.”

Investigators with Consumer Affairs’ Financial Fraud Section conducted the investigations. In all, Consumer Affairs has charged nearly 70 companies that allegedly offered mortgage modification services to consumers without being licensed to do so.

In February, Consumer Affairs won a $469,500 trial decision against two corporate defendants and two individuals accused in a lawsuit of defrauding financially struggling homeowners through a variety of deceptive mortgage foreclosure “rescue” practices.

Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey ) or 973-504-6200.

—TOM HESTER SR., NEWJERSEYNEWSROOM.COM

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