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.
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