New York Attorney General continues to crack down on mortgage fraudsters

A mortgage broker and two lawyers have reached a settlement in their mortgage rescue scam case

A mortgage broker and two lawyers have reached a settlement in their mortgage rescue scam case.

New York Attorney General Eric T. Schneiderman has been aggressively targeting mortgage fraudsters, and his most recent win will see alleged mortgage rescue scammers paying hefty settlements.

"This shameful scam re-victimized families already suffering from the collapse of the housing market," Schneiderman said in a statement.

The state’s top prosecutor announced in mid-September that his office had reached a more than $400,000 settlement in a mortgage “rescue” scam that resulted in 14 New York homeowners losing their deeds and equity, according to Newsday.

Empire Property Solutions allegedly targeted struggling homeowners by offering services to save their homes from foreclosure and help them repair credit.

John Rutigliano and Kenneth Kiefer convinced homeowners to sign over the deeds to their homes through sales-leaseback agreements, according to Schneiderman, with the promise the families could stay in their homes and rent while building credit. The company promised to turn the homes back over within a year.

An investigation determined the funds were not used to pay down the mortgages, as promised, according to Newsday.

Others involved in the alleged scam were attorneys Barry Zornberg, since disbarred, and Nanci Hirsch, as well as mortgage broker Leonie Neufville.

For her part, Neufville settled for $10,000 and has been banned from acting as a broker for five years.

Schneiderman kicked off a public awareness campaign in July, taking aim at “mortgage rescue” scams.

“They take victims and they re-victimize them, and there is nothing lower than that,” Eric Schneiderman, New York’s Attorney General, said at a press conference at the time.

He vowed to take these companies to task and it seems he is making good on that promise.