Wednesday, November 3, 2010

LAW: Newton law firm faces query over rules protecting tenants. Attorney General seeks data on evictions.

Harmon Law Offices, a Newton firm that specializes in foreclosures, is being investigated by the state attorney general’s office for allegedly unlawfully sending eviction notices to residents of bank-owned properties.

State officials want to determine whether Harmon Law failed to comply with a new Massachusetts law that protects tenants living in foreclosed homes from eviction, a spokesman for Attorney General Martha Coakley said yesterday.

Coakley said her office also is looking into allegations that Harmon Law disregarded a court order requiring it to notify the state before foreclosing on homes with mortgages originated by subprime lender Fremont Investment & Loan.

The investigation comes as state and federal regulators nationwide are stepping up scrutiny of lenders and their law firms for sloppy or fraudulent foreclosure-related practices. Federal Reserve chairman Ben S. Bernanke yesterday said regulators will investigate “irregularities in foreclosure practices at a number of large financial institutions.’’

Coakley’s office notified Harmon Law on Sept. 30 about its investigation and requested the company provide documents related to “unfair and deceptive trade practices,’’ according to a court filing. Harmon Law responded by filing a complaint in Suffolk Superior Court requesting a judge set aside the request, claiming it sent eviction notices in accordance with the law.

Tina Cassidy, a spokeswoman for Harmon Law, said the state is concerned about evictions that were served after Aug. 7, when the law took effect. But she said the evictions were proper because the foreclosures took place prior to Aug. 7. In addition, the firm also argues that its clients, who are mortgage lenders, actually carried out the evictions.

Cassidy would not comment on the allegations regarding Fremont. As part of a 2009 settlement between the state and Fremont, lenders or companies servicing loans must notify the state before foreclosing upon homes with mortgages originated by the California-based company.

Also today, DJSP Enterprises Inc., a troubled firm that provides foreclosure-related services nationwide, said Mark P. Harmon, president of Harmon Law, has resigned from its board of directors.

DJSP Enterprises, which is registered in the British Virgin Islands but headquartered in Florida, is one of the largest mortgage-servicing companies in the United States, according to documents filed with the Securities and Exchange Commission. Its president, David J. Stern, owns one of four law firms that are widely known as “foreclosure mills’’ and are being investigated by Florida’s attorney general for allegedly fabricating documents to speed up foreclosures and evict tenants.

Harmon declined to comment on his relationship with DJSP.

Paul Collier, a Cambridge lawyer who represents many clients facing foreclosure, said a group of local lawyers has been monitoring the procedures Harmon Law uses to evict tenants living in foreclosed homes. The new state law is intended to keep tenants from being forced out of a property regardless of when a foreclosure occurred, Collier said. “The purpose of the provisions of this statute is to protect anyone who is still in their homes,’’ he said.

Jenifer B. McKim Boston Globe October 26, 2010

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