Ex-Bank Employee to Pay Back Victims in Foreclosure Fee Scam

Attorney General Martha Coakley’s office announced on Friday that a Danvers man formerly employed as a mortgage loan officer at Bank of America had reached a settlement with state authorities to pay back illegal fees he demanded from clients before providing loan modification services.

Christian Hayes of Danvers allegedly attempted to capitalize on the foreclosure crisis by “targeting and preying upon” homeowners in immediate danger of losing their homes, according to Coakley’s office. Hayes was also the former owner and principal of the now dissolved Foreclosure Alternatives.

“Homeowners who were seeking to save their homes from foreclosure were scammed by a bank employee who used his bank affiliation to gain their trust in seeking to avoid foreclosure,” said Coakley in a press release. “It is particularly egregious when individuals who are legitimate bank employees exploit this status to take advantage of unsuspecting homeowners.”

State prosecutors filed a complaint on April 8, 2010, claiming that while Hayes worked at Bank of America, he used his company (Foreclosure Alternatives) to demand up to $1,500 in advance fees from clients before negotiating loan modifications with them to help avoid foreclosure.

Those fees were illegal under foreclosure rescue regulations put into law in 2007 by Coakley’s office in an effort to deter unfair business practices in regard to foreclosures.

Coakley’s office also claimed Hayes falsely told some of his clients that he was an attorney with the bank.

The agreed upon settlement, which was filed Friday in Suffolk Superior Court, requires Hayes to pay $6,350 in restitution in addition to civil penalties. He is also barred from engaging in any foreclosure related services in Massachusetts in the future.

Friday’s announcement encouraged homeowners who are having difficulty paying their mortgages to speak directly with lenders or servicers about affordable loan modifications, as well as seeking free assistance from nonprofit agencies that facilitate those services.

Coakley’s office provides further details about statewide foreclosure prevention efforts online at www.mass.gov/ago.