WASHINGTON, D.C. — (RealEstateRama) — The Justice Department today filed a lawsuit alleging that several mortgage loan modification service providers violated the federal Fair Housing Act and Equal Credit Opportunity Act by intentionally discriminating against Hispanic homeowners by targeting them for predatory mortgage loan modification services and interfering with their ability to receive financial assistance to maintain their homes. The defendants named in the lawsuit are The Home Loan Auditors LLC, Century Law Center LLC, SOE Assistance Center Inc., Spieker Law Office and the principals of these entities: Omar Alcaraz, Araceli Castro, Oralia Gutierrez, Hortencia Leon, Raul Luna, Elena Ramirez and David Spieker.
The complaint, which was filed today in the U.S. District Court for the Northern District of California, alleges that the defendants engaged in a pattern or practice of marketing to and encouraging Hispanic homeowners to pay approximately $5,000 for unnecessary and ineffective loan audits. The defendants told the homeowners that audits were essential for a loan modification, but in fact the audits had no impact on the loan modification process and provided no financial benefit. As part of their advertised loan modification service, the defendants encouraged their clients to stop making mortgage payments and instructed them to cease contact with their lenders. This conduct resulted in many homeowners defaulting on their mortgage payments and ultimately losing their homes.
This lawsuit arose as a result of complaints filed with the U.S. Department of Housing and Urban Development (HUD) by two of the defendants’ former clients. The complainants elected to have the case heard in federal court and HUD referred the case to the Justice Department.
“Intentionally targeting any community or person with predatory mortgage services because of their ethnicity or national origin violates federal law, harms working families and hurts our entire economy,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The defendants in this case tried to exploit Hispanic communities and homeowners already suffering from abusive, discriminatory financial practices during the Great Recession that drove the American housing market into crisis and our economy into freefall. The Justice Department’s lawsuit serves as a stark reminder and sends a clear message that we will work tirelessly to ensure that all homeowners can access mortgage services free from discrimination.”
“Hispanic families struggling to stay in their homes do not need empty promises that make their housing and financial situation worse,” said Gustavo F. Velasquez, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity. “HUD is gratified that the Department of Justice is taking action against individuals and companies that victimize homeowners because of where they come from or because they speak Spanish or other languages.”
The Civil Rights Division and other agencies involved in this matter are part of the Financial Fraud Enforcement Task Force, established by President Obama to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
Anyone with information on the loan modification services provided by The Home Loan Auditors LLC, Century Law Center LLC, SOE Assistance Center Inc. or Spieker Law Office should contact the Civil Rights Division’s Housing and Civil Enforcement Section at 1-800-896-7743 (press 1 to continue in English, and select option 5) or atTHLALawsuit (at) usdoj (dot) gov
A copy of the complaint, as well as additional information about fair lending enforcement by the Justice Department, can be found at www.justice.gov/fairhousing. Fighting illegal lending discrimination is a top priority of the Justice Department. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.