CA Attorney General Files charges in massive 17 state mortgage fraud scheme.

Real Estate Agent with 1st Action Real Estate

CA State Attorney General Kamala Harris sued Philip Kramer, the Law Offices of Kramer & Kaslow, two other law firms, three other lawyers, and 14 other defendants who are accused of working together to defraud homeowners across the country through the deceptive marketing of "mass joinder" lawsuits. Prominent foreclosure attorneys Phillip Kramer and Mitchell Stein and at least 17 others have been accused of luring desperate homeowners into the scheme using deceptive advertising and telemarketing schemes aimed at millions of people in California and 16 other states. 

The scheme claimed that courts have found that most mortgage lenders engaged in predatory lending practices or approved inappropriate loans (well, that part is certainly true), and that the homeowners bank was one of the guilty. As alleged in the lawsuit, defendants preyed on desperate homeowners facing foreclosure by selling them participation as plaintiffs in mass joinder lawsuits against mortgage lenders. Defendants deceptively led homeowners to believe that by joining these lawsuits, they would stop pending foreclosures, reduce their loan balances or interest rates, obtain money damages, and even receive title to their homes free and clear of their existing mortgage. Defendants charged homeowners retainer fees of up to $10,000 to join as plaintiffs to a mass joinder lawsuit against their lender or loan servicer.

It probably comes as no surprise that theses same 'prominent foreclosure attorneys' had previously been 'prominent loan modification specialists' but it is alleged that Kramer sent an email to another fellow defendant last year stating "Only morons would prefer to 'sell' mods from this day forward". 

Homeowners who have paid to be added to one of the lawsuits should contact the State Bar if they feel they may be victims of this scam. They can also contact a HUD-certified housing counselor for general mortgage related assistance. If you have sent money to any of the following seized entities, you should contact the CA Attorney Generals Office at

The Department of Justice has seized the practices of the following non-attorney defendants:
Attorneys Processing Center, LLC; Data Management, LLC; Gary DiGirolamo; Bill Stephenson; Mitigation Professionals, LLC; Glen Reneau; Pate Marier & Associates, Inc.; James Pate; Ryan Marier; Home Retention Division; Michael Tapia; Lewis Marketing Corp.; Clarence Butt; and Thomas Phanco as well as seizing the practices and accounts of attorney defendants:The Law Offices of Kramer & Kaslow; Philip Kramer, Esq; Mitchell J. Stein & Associates; Mitchell Stein, Esq.; Christopher Van Son, Esq.; Mesa Law Group Corp.; and Paul Petersen, Esq.

Attorney General Harris is challenging the defendants' alleged misconduct in marketing their mass joinder lawsuits; her office takes no position as to the legal merits of any claims asserted in the mass joinder lawsuits filed by defendants.

Victims in the following states are known to have received these mailers, or signed on to join the case. This is a preliminary list that may be updated:

Alaska, Arizona, California, Colorado, Connecticut, Florida, Hawaii, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New York, Ohio, Texas, Washington.

For more information please go to:


Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Pat & Wayne Harriman 08/19/2011 07:46 AM
  2. Pamela Seley 08/19/2011 08:28 AM
  3. Gene Riemenschneider 08/19/2011 12:06 PM
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Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Gene, this is great news! It's about time to stop "defrauding" homeowners out of their hard-earned money in false hope and promises. I had no idea other states were involved. I thought it was only California and Nevada, so thanks for posting. I will be re-blogging!

Aug 19, 2011 08:19 AM #3
Sidney Kutchuk
Property Management & Sales at REALTY WORKS TEMECULA, CA 92590 (951) 217-6745 - Temecula, CA
Property Management & Sales Experts 951-217-6745

HI Gene,

More bad guys off the streets.

To bad it takes so long to get them off the streets.

Aug 19, 2011 08:30 AM #4
Team Honeycutt
Allen Tate - Concord, NC

It's bad to take advantage of those who are down on their luck.  Karma will certainly get these if the govenment doesn't.

Aug 19, 2011 10:24 AM #5
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Just read of another Virginia RE agent who had their license revoked and found guilty of mortgage fraud.  Unfortunately to many people have been hurt in this schemes and it will be years to sort it all out.

Aug 19, 2011 10:42 AM #6
Bruce Kunz
C21 Solid Gold Realty, Brick, NJ, 732-920-2100 - Howell, NJ
REALTOR®, Brick & Howell NJ Homes for Sale

Thanks, Gene. It's great to see some of these 'games' are being ended. Hopefully those that were sucked in by them will end up benefiting somehow in the end for a change.

Aug 19, 2011 10:47 AM #7
Ed Gillespie
Rocklin, CA

Thanks so much for posting this.  I just closed a refinance for a customer who had been approached by someone pulling this scheme; the required retainer was $5,000.  Glad to see that action is being taken against these preadtors.

Aug 19, 2011 11:08 AM #8
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

This is good news.  One of my clients almost got sucked into this.  I warned him to be careful.  They wanted him to drive 500 miles to meet with them.  I told him they probably wanted to get him there to pump him for money.

Aug 19, 2011 12:00 PM #9
John Juarez
The Medford Real Estate Team - Fremont, CA

I read about this in our local paper. I was delighted with the news. Desperate people will do stupid things…like paying a bunch of money to an attorney based on some illegitimate claim that joining into a lawsuit can make your troubles disappear.

I hope we hear more stories about bad actors like these being put out of action.

Aug 19, 2011 01:16 PM #10
Janet O'Neill
Century 21 Showcase, REALTORS - Scotts Valley, CA

I really appreciate your post.  One of the benefits of this community is the sharing of accurate information, which I'm sorry to say is in short supply these days!  Keep up the good work.

Aug 19, 2011 02:13 PM #11
Doug Anderson
Tucker Associates Real Estate Services - Danville, CA
Bay Area Real Estate Views

It is certainly nice to see some traction with catching and punishing those responsible for these schemes which more than likely were intended to defraud desperate folks.

Aug 19, 2011 02:43 PM #12
Jerry Murphy, CRS, SRES
Long Realty West Valley - Anthem, AZ
Anthem, Phoenix, and Scottsdale AZ Real Estate

And people say we need LESS regulation eh? It's because of scum like this that we need MORE regulation when it comes to ANYTHING involving large sum of money or property, because there will always be people like this who will prey upon those who are desperate, naive, and/or ignorant.  Good post Gene and best of luck to you.

Aug 19, 2011 03:11 PM #13
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

I agree with Jerry #14.. Unfortunately, we still need regulations to protect the consumer from these type of scams.

Aug 19, 2011 03:52 PM #14
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

Realtors® are often on the front lines of these kinds of things - not necessarily as participants but we often catch wind of things through our clients. Education is the key because by the time law enforcement gets involved the crime has already been committed. Most of these people have already, or probably will soon, lose their homes and they just paid some schmuck up to $10 grand that they didn't have to  begin with. It sounds like these guys switched out of loan mods when the state cracked down on that here last year and started requiring anybody doing loan mods to post a $100,000 bond with the AG. Unfortunately they left the loophole that allows attorneys to continue to charge up-front fees for services and these guys walked right through that hole with boots on. I'll be anxious to see what kind of sentences they hand down.

Always good to remind our clients that if something sounds too good to be true - it usually is. Unfortunately desperate people are often the easiest to victimize. Right now there's somebody sitting up late trying to figure out a way to refine this scheme so they don't get caiught.

Aug 19, 2011 04:59 PM #15
George Bennett
Inactive - Port Orford, OR
Inactive Principal Broker, GRI

Thanks Gene. This is a good beginning. I hope the AG gets convictions and that these predators go to jail as well as being held to account in the civil courts.

Aug 19, 2011 05:48 PM #16
Keith Lawrence
RE/MAX Properties - Mahwah, NJ
ABR, CDPE, SFR, 203K Specialist

It good to see this guys off the street.

I can see more regulations come out to protect the homeowners from scams like this

Aug 20, 2011 01:23 AM #17
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

These folks that continue to pray on home owners going through one of the most difficult times in their lives should be put away.  Good work from the Attorney General of California.

Aug 20, 2011 01:41 AM #18
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Desperate circumstances bring on desperate solutions. Temptation abounds and only those grounded in doing the right thing can survive it. Sad for all involved when anyone caves in


Aug 20, 2011 03:07 AM #19
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411


For sure, bust the crooks and opportunists taking advantage of consumers.

I just wonder where consumer protection advocates and law enforcement were when lenders were praying on consumers in 2003 to 2006.  The sub prime loans being made that culminated in this mess weren't being hidden.

Aug 20, 2011 08:56 AM #20
Christine Carpenter

Stumbled onto your site/post online. I paid K &K nearly 3 grand with hopes for a great modification and was eventually rolled into the Stein Mass joinder before finally disassociating from them all, including Mitigation Proffessionals LLC. I am a struggling, cancer surviving, widowed, single mother of minor children and yep, I was desperate. When everyone you've dealt with (including your lender) is under investigation and an 18 month struggle has proven fruitless, it is very frustrating! I appreciated finding and reading your post/update on this, thank you.   Hope they all get set straight!    

Aug 31, 2011 09:15 PM #21
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

Christine - sorry for all your troubles. So many innocent people have been victimized and once that happens they become desperate thinking surely in our country help is available and hope still lives. Then somebody like these clowns come along to take one more shot at you. Best of luck to you.

Sep 03, 2011 09:00 AM #22
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