N.J. Debt Relief Firms Settle Over Foreclosure Rescue Scam

Recent Post N.J. Debt Relief Firms Settle Over Foreclosure Rescue Scam

The owner of several New Jersey debt relief companies that assured homeowners they could avoid foreclosure with the help of the companies’ mortgage modification services has settled with the state after the attorney general’s office accused him of fraud.

The businesses owned by Stephen Pasch — New Day Financial Services Inc., American Credit Repair and Settlement, NDROA Inc., and Paramount Debt Settlement USA — are alleged to have collected upfront fees from homeowners after promising them mortgage loan modifications, a practice that is illegal under state law, and then failed to provide any mortgage debt relief, often leaving the customers in worse financial shape, according to Attorney General Paula Dow’s lawsuit.

Under terms of the settlement agreement, Pasch will pay the state an $805,000 civil settlement, be prohibited from applying for a state banking license for 10 years, and be banned permanently from conducting any debt relief business in New Jersey related to loan modification, debt adjustment, or credit repair (“Mortgage Rescue Firm Owner Will Pay $805,000 to New Jersey in Settlement,” Bloomberg, Oct. 18, 2010).

Ejike N. Uzor, a licensed attorney and co-defendant in the lawsuit, settled claims against two of his companies — Uzor Financial Solutions and Ejike N. Uzor and Associates — for $25,000.

The two men together were also alleged to have fraudulently used a purported nonprofit organization called the American Financial Advocacy Council as part of their scam.

The settlement agreement resolves the charges brought by Dow that Pasch and his companies misled consumers through false advertising and deceptive solicitations in violation of New Jersey’s Consumer Fraud Act, and engaged in debt adjustment activity without a license in violation of the state’s Debt Adjustment and Credit Counseling Act and the federal Credit Repair Organizations Act.

“This case is another example of our commitment to fighting deceptive practices in the mortgage business and related industries, such as loan modification, and to holding accountable those who mislead vulnerable homeowners,” Dow said in a statement announcing the settlement (“Attorney General Announces Settlement of Fraud Case With Mortgage Rescue Firms,” New Jersey Attorney General’s Office press release, Oct. 18, 2010).

“Simply put, these companies exploited people who looked to them for hope and paid them for help. This type of activity is reprehensible anytime, but particularly during tough economic times,” Dow said.

The defendants’ civil settlements will be used to provide restitution to consumers for any upfront fees that were paid.

The New Jersey Division of Consumer Affairs has contacted homeowners who filed complaints about Pasch and Uzor to provide information about the restitution fund and how claims will be processed.

Read the settlement agreement:
Consent Judgment, N.J. Attorney General v. New Day Financial Solutions et al.

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