Neal J. Vanderpoel II and Eileen P. Vanderpoel, Medford, New Jersey and their sons Ryan Vanderpoel, Medford, New Jersey and Neal J. Vanderpoel IV, Magnolia, New Jersey, as announced today, have been charged in a lawsuit to halt a scheme in which they operated multiple companies to defraud struggling homeowners by offering them mortgage adjustment services that provided no meaningful relief and often made their precarious financial situation even worse.
The State’s complaint alleges that the Vanderpoels’ advertised, offered for sale, and performed fraudulent or worthless loan modification and other debt adjustment services to New Jersey consumers through a web of corporate entities. The corporate entities include Financial Services for America; Financial Processing Services, LLC; Tri-State Financial Relief, LLC; and Mortgage Help and Loan Audits of America, LLC, which are also named as Defendants.
Through their corporate entities, most of which were not authorized to provide debt adjustment services in New Jersey, the Vanderpoels charged consumers up-front rates grossly in excess of the legal limits for permissible charges by licensed debt adjusters, netting them well over a million dollars in profits, the suit alleges.
After filling financially distressed consumers with false hope of guaranteed loan modifications, the Defendants failed to deliver, often causing consumers to fall further behind on their mortgage payments and making the threat of foreclosure more imminent, the suit alleges.
The State’s 18-count complaint alleges that the Defendants grossly exceeded the $25.00 fee cap imposed by the New Jersey’s Debt Adjustment and Credit Counseling Act by charging at least 556 New Jersey consumers $3,200 or more to prepare a “Forensic Audit Report,” which would purportedly assist consumers in their mortgage modifications.
The complaint also alleges that Defendants violated the New Jersey Consumer Fraud Act, advertising regulations, and the Nonprofit Corporations Act.
According to the complaint, the Defendants rarely if ever reviewed the consumers’ underlying notes or mortgage instruments and were not qualified to render opinions as to the legality of a consumer’s mortgage. The “Forensic Audit Report,” which Defendants generated using third-party compliance software, did not in fact assist consumers with their mortgage modifications, as promised by Defendants, and was largely worthless, the complaint alleges.
As a result of Defendants’ unconscionable and unlawful practices, consumers often forfeited all monies paid to Defendants, were forced to spend additional time and money to try to remain in their homes, were forced to file for bankruptcy, ended up losing their homes in foreclosure, and/or were forced to modify their loans on less favorable terms, the complaint alleges.
Today, the State also obtained a court order temporarily restraining Defendants from providing any loan modification or debt adjustment services, preventing Defendants from conducting business under unregistered assumed names, freezing all assets of Financial Services of America and the other corporate entities, and prohibiting Defendants from disposing of any assets derived from their purported mortgage modification businesses, among other relief.
The current action is brought against not only the current entities, but also against the family members individually. The State sought and secured temporary restraints in part to prevent the Vanderpoels and their companies from seeking to evade accountability as they had in the past.
Attorney General Gurbir S. Grewal and Department of Banking and Insurance (DOBI) Commissioner Marlene Caride made the announcement today.
“We have zero tolerance for predatory practices targeting vulnerable consumers who want nothing more than to stay in their homes, especially in the midst of a pandemic,” said Attorney General Grewal. “And by partnering with the Department of Banking and Insurance, as we are today, we are sending a message that we won’t hesitate to bring the full range of the State’s consumer financial protection laws to bear when we crack down on unconscionable consumer abuses.”
“Today was an important step in ending the deceitful practices perpetrated by these individuals and preventing other homeowners from falling victim to this scheme. These defendants took advantage of people already struggling financially and made their situations worse. The fact that they targeted our residents during a time when people are especially vulnerable makes their actions that much more reprehensible. With this action we are sending a message that those who engage in predatory and abusive practices will be held accountable,” said Commissioner Caride.
Today’s lawsuit reflects the Division of Consumer Affairs’ increased focus during the Murphy Administration on unconscionable practices in the markets for consumer financial products and services.
Those protections are especially important as the COVID-19 emergency enters its eleventh month. And the State’s complaint alleges that the Vanderpoels sought to capitalize on consumers’ financial insecurity by misleadingly suggesting that one of their companies offers services designed to address hardships caused by the COVID-19 pandemic.
“For most homeowners, the prospect of losing their homes is a time of stress and fear. In this lawsuit, we allege that these defendants callously preyed on that vulnerability,” said Paul R. Rodríguez, Director of the Division of Consumer Affairs. “Instead of helping homeowners out of a financial crisis, as they promised, defendants made it worse by causing people to fall further into debt as they paid for undelivered services with money that could have been applied to their mortgages.”
For the Division of Consumer Affairs, Deputy Attorney Donna J. Dorgan, Assistant Section Chief John Regina and Section Chief Patricia Schiripo of the Consumer Fraud Prosecution Section in the Division of Law’s Affirmative Civil Enforcement Practice Group and Assistant Attorney General Jeremy Hollander of the Affirmative Civil Enforcement Practice Group are handling the matter, with assistance from attorney Andrew Esoldi. Investigator Brian Penn and Loretta Creggett and Supervising Investigator Jennifer Micco of the Office of Consumer Protection are handling the investigation for the Division
For the Department of Banking and Insurance, the matter is being handled by Deputy Attorney General Garen Gazaryan, Assistant Section Chief Nicholas Kant, Section Chief Richard E. Wegryn, Jr., and Assistant Attorney General Raymond R. Chance, III, in the Division of Law’s Financial Affairs Practice Group.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse can file an online complaint with the State Division of Consumer Affairs by visiting its website or calling 1-800-242-5846 to receive a complaint form by mail.
Consumers who have any issue or complaint concerning any entity regulated by the Department of Banking and Insurance, can contact the Department’s Consumer Hotline at 1-800-446-7467 or go to the Department website and click on Consumer Assistance – Inquiries/Complaints, at https://www.dobi.nj.gov
The mission of the Division of Consumer Affairs, within the Department of Law and Public Safety, is to protect the public from fraud, deceit, misrepresentation and professional misconduct in the sale of goods and services in New Jersey through education, advocacy, regulation and enforcement. The Division pursues its mission through its 51 professional and occupational boards that oversee 720,000 licensees in the state, its Regulated Business section that oversees 60,000 NJ registered businesses, as well as through its Office of Consumer Protection, Bureau of Securities, Charities Registration section, Office of Weights and Measures, and Legalized Games of Chance section.