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Foreclosed Md. homeowners sue N.Y. law firm for fraud

Edward Dayhoff Jr. and his wife, Monica Dayhoff, say they were behind on their home mortgage payments when they received an unsolicited phone call from a man who said he worked for an organization that helped homeowners in similar situations, and asked if a law firm could contact them.

The Silver Spring couple agreed, and in October 2011 entered into a foreclosure consulting contract with American Legal Plans Group, which worked in conjunction with the Litvin Law Firm P.C. of Brooklyn, N.Y.

But the Dayhoffs said in a class action lawsuit filed last week in U.S. District Court in Greenbelt that they and hundreds of other Marylanders were deliberately misled by the law firm, which has an office in Silver Spring. (ALPG is not named as a defendant.)

The Dayhoffs said that because of the Litvin firm’s alleged inaction, their family of seven was evicted and now must live in three different locations.

“The Dayhoffs were denied a modification of their mortgage simply because the Litvin Law Firm could not or did not return phone calls from the Dayhoffs’ lender,” the suit said. “Litvin collected money for more than a year from the Dayhoffs and did absolutely nothing for them.”

Under their original contract, the Dayhoffs paid a fee of $595 per month. That was reduced to $500 a month in October 2012, when the Litvin firm separated from ALPG and took exclusive control of their account, they allege.

They said “they were deliberately misled by Litvin as to the status of their case and the specific efforts expended by Litvin on their behalf.”

Specifically, the couple said the firm did not tell them that they had received a letter on Oct. 29, 2012, from their lender denying a modification “for two reasons, 1) lack of communication and, 2) failure to return phone messages left for Litvin to return.”

“At no time did Litvin inform the Dayhoffs that they were denied a modification …,” the complaint said. “Further, Litvin received notice from the Dayhoffs’ lender that a lawsuit to foreclose on the property had been filed, yet Litvin failed to provide this information to local counsel for Litvin so mediation and a foreclosure defense could be initiated.”

The foreclosure sale was scheduled for Nov. 6, 2012. However, on that day, a representative from the firm spoke to Monica Dayhoff by phone and told her “not to worry,” because they were “‘on the phone with the lender discussing the details of the pending modification at this very minute.’”

The Dayhoffs filed the suit on behalf of themselves and more than 700 Marylanders who paid for loan modification services from the Litvin Law Firm. They allege violations of Maryland’s Protection of Homeowners in Foreclosure Act and the state’s Consumer Protection Act. They also assert claims of negligent misrepresentation, fraud, and restitution/unjust enrichment.

They said all of the class members were initially contacted at home by someone claiming to be part of a “nonprofit” organization of Marylanders who have “been through the foreclosure process with a success story of a firm that helped them save their home.”

Gennady Litvin, the law firm’s owner and managing partner, is named as a defendant in the lawsuit along with the law firm. Litvin did not return a call requesting comment Monday.

Brian S. Jablon, an attorney at Wellens & Jablon LLC in Severna Park, represents the Dayhoffs. Jablon declined Monday to comment on the case, or to make his clients available for an interview.

Richard B. Rosenblatt, an attorney at The Law Offices of Richard B. Rosenblatt P.C. in Rockville, represents clients seeking loan modifications. Rosenblatt, who is not involved in the case, said Monday he has had clients who have had similar experiences as the Dayhoffs are alleging, although he did not specify whether they were with the Litvin firm.

“Unfortunately there is a lot of fraud going on,” he said. “That is why people should hire attorneys that they can meet face-to-face.”

Regardless of civil or criminal liability, Rosenblatt and Michael P. Coyle, an attorney at The Law Offices of Chaifetz & Coyle P.C. in Columbia, said that, if the allegations are true, the Litvin Law Firm’s conduct violates legal rules of professional conduct.

Coyle said Monday he has represented a couple of people who previously used the Litvin Law Firm.

“If what I have been told by my clients is true, there are ethical and legal problems,” Coyle said. “As lawyers, you can’t charge a fee that isn’t reasonable.”

He said the $500 per month fee the firm charged did not seem reasonable.

“It’s an arbitrary number,” Coyle said.