Class action suit claims fraud by Fresno foreclosure firm

September 5, 2013 12:00:00 AM PDT
A new class action lawsuit claims hundreds of homeowners in the Valley are falling victim to a company's foreclosure fraud.

Two legal teams are in the middle of a court battle against the company called Legal Foreclosure Services, Inc. The lawsuits claim the company promised to help save hundreds of homes from foreclosure, but instead it scammed people out of their hard earned money and did nothing to help them keep their homes.

A TV commercial from Legal Foreclosure Services, Inc. was enough to convince the owner of a Madera home to rely on that company for foreclosure protection. "The way my mom saw it is that we will do everything to fight for this house," Guadalupe Gomez said.

Gomez is holding onto receipts that account for nearly $4,000. For two years Gomez's mother made monthly payments, thinking Legal Foreclosure Services would help her get a loan modification. But the Gomez family says the company never filed any paperwork, despite the hard-earned money already paid in fees outlined in her contract.

Gomez then went into the company offices on Shaw Avenue in Northwest Fresno. "Right off the bat it seemed fishy," he said. "The guy didn't really seem competent."

He told Action News he was then confronted by an owner who refused to refund the money and offered no additional help. "Just the way he came about the issue, I knew that we were not going to get anything back," Gomez said. "At this point I'm going to try to get some legal help and see what can be done."

And that is where Fresno attorney William Krieg comes in. He has filed a class action lawsuit alleging Legal Foreclosure Services illegally asks for advanced fees, and failed in its promise to obtain loan modifications; causing some to lose their homes.

"What we do know is that there are at least 200 people over the last three years that have paid something between $2,000 and $5,000 each," Krieg said.

Central California Legal Services, a non-profit law firm, is also fighting Legal Foreclosure Services. It's pushing for an injunction to force the company to prove, in court, its operating by the book. Attorney Ofra Pleban says she's been investigating the fraud claims for a year.

"[The customers] really don't have the money to pay the mortgage, let alone to pay to these fraudsters," Pleban said. "They're paying them thousands of dollars, but also what's important is they're foregoing seeking other legitimate ways and venues to save their home."

"These people know we're coming after them, they know their time is limited," Krieg said. "But the question is; are we going to be able to get money back." Gomez certainly hopes so. But, first, he wants to stop the business flowing into the Northwest Fresno office. "Hopefully it won't happen to anybody else," Gomez said.

Legal Foreclosure Services has changed its name several times in the past few years. Records show it's also known as Foreclosure Counseling, Inc. and Foreclosure Professionals, Inc.

Action News spoke with an owner of the business who refused to answer any questions about his business practices. He referred us to his attorney who has not yet responded to repeated attempts for a comment.


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