law firm sued for defrauding korean immigrants

This week in La Crescenta, California, the Asian Pacific American Legal Center filed a lawsuit on behalf of 28 people who say they fell victim to a costly home loan scam targeting Korean immigrants: Lawsuit alleges firm targeted Korean immigrants.

The lawsuit, filed in Los Angeles County Superior Court, alleges that lawyer Timothy D. Thurman and Trinity Law Associates falsely advertised that homeowners could prevent foreclosure and reduce mortgage debt by hiring Trinity for "loan litigation" services.

Trinity apparently targeted Korean immigrant homeowners at risk of foreclosure and charged thousands of dollars for services and benefits that Trinity never provided. As a result of Defendants' fraud, the homeowners either lost their homes to foreclosure or faced increasing risk of losing their homes to foreclosure.

Here an excerpt from APALC's press release:
The suit states that from February 2009 to October 2009, Trinity used a wide network of Korean-speaking agents and employees in order to advertise and market "loan litigation" services to the Korean immigrant community. Trinity and its agents made false representations to consumers, promising that homeowners who filed lawsuits against their lenders would obtain significant reductions in their mortgage debt and avoid foreclosure. Trinity and its agents advised clients to stop making mortgage payments and charged fees ranging from $4,000 to $16,500. However, Trinity failed to properly perform legal services or prevent foreclosures. In October 2009, after collecting over $240,000 from plaintiffs, Trinity abruptly closed its doors, leaving homeowners without any assistance. The complaint includes claims for fraud, statutory violations, and breach of contract.

"Not only did Trinity fail to prevent foreclosures, but their conduct expedited the foreclosure process for many clients and caused families to lose their homes," said Yungsuhn Park, staff attorney at the Asian Pacific American Legal Center. "Trinity advised homeowners to stop making their mortgage loan payments and instead charged clients thousands of dollars in fees."

Trinity's fraudulent scheme is a prime example of the flood of loan modification-related fraud that has followed the rise in foreclosures resulting from the economic recession. The rise in scams targeting distressed homeowners has garnered the attention of the State Bar of California, the California Office of the Attorney General, the Federal Trade Commission, and local law enforcement agencies. These agencies are all actively investigating and prosecuting attorneys and businesses that have engaged in real estate scams. Consumers who have complaints against attorneys due to loan modification or lender litigation fraud should contact the State Bar of California to file a complaint (www.calbar.ca.gov).

"Trinity targeted its false advertising to the Korean immigrant community and used Korean-speaking agents to gain the trust of Korean American homeowners dealing with financial hardship. Trinity violated several laws that were intended to protect the rights of immigrant consumers. These attorneys must be held accountable for violating their professional duties as attorneys and ignoring the law," said Julie A. Su, Litigation Director at the Asian Pacific American Legal Center.

There are some new and existing laws that protect immigrant homeowners from these types of schemes. Since October 2009, a new state law prohibits attorneys from collecting advance fees, including a fee retainer, for services in which the attorney attempts to negotiate with the mortgage lenders or offers to perform a mortgage loan modification for homeowners. Loan modification consultants must also provide a notice that explains that these services are available for free from non-profit organizations. Furthermore, if loan modification or other mortgage loan forbearance services are offered or negotiated in Spanish, Chinese, Tagalog, Vietnamese, or Korean, existing law requires that a translated copy of the required notice be provided to the borrower in that second language.

"For many immigrants, owning a home is part of the American Dream. Trinity preyed on our community, and it's unfortunate that these homeowners never had a real chance to save their homes. Homeowners need to know that no one, including attorneys, can charge an upfront fee to help you negotiate with the bank to modify your mortgage loan and that various nonprofit organizations provide these services for free," said Esther Ro, Equal Justice Works AmeriCorps Recovery Fellow at APALC.
Some basic tips for homeowners in this situation: avoid any person who offers guarantees to stop a foreclosure; don't pay up-front fees -- they're illegal; and seek help from a non-profit first. You don't need an attorney for loan modifications. More on this case here: Center accuses law firm of defrauding Korean immigrants.

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