Marlon Hernandez was getting a little desperate in the first part of 2009 as he looked at his growing mortgage bills.
His mortgage payments had gone up under an adjustable rate and things were getting tough despite the fact he was working two jobs. When a pre-foreclosure notice came in the mail, he began to pay attention to things such as the ads on Spanish radio proclaiming loan modification help.
That’s what brought the Malden man, and at least 16 other Latinos, to the Yeamans Street, Revere, offices of Attorney David Zak.
“That’s when the nightmare started,” Hernandez said this week.
The nightmare was a series of unmet promises from Zak, a slick speech to smooth over every concern Hernandez had, and an upfront payment of $5,600 for a modification that never came.
Last week, at the Massachusetts Commission Against Discrimination (MCAD) enacted justice for Hernandez and 16 other defendants in a case that revealed Zak had purposely set up shop in Revere to take advantage of distressed Latino homeowners looking to modify loans and reconcile with the banks – homeowners that the MCAD said he considered “stupid” and “gullible.” That justice came through the organizing of the Chelsea Collaborative and the determination of the Greater Boston Legal Services attorneys.
Zak was also ordered to pay $233,600 in fines.
“Attorney Zak engaged in conduct that can only be described as despicable,” said Commissioner Sunila Thomas-George. “When tough times hit and hard-working families struggle to pay the mortgage, the last thing they need is to have a lawyer defraud them out of thousands of dollars by exploiting their limited English proficiency. The $233,600 judgment should stand as a warning to everyone that there are serious consequences for engaging in discriminatory conduct.”
In her decision, MCAD Hearing Officer Betty Waxman found that Attorney Zak made tens of thousands of dollars preying upon the fear and uncertainty that the collapse of the housing bubble created among Latinos, but ultimately left his Latino clients at far greater risk of losing their homes.
Waxman determined that Zak specifically targeted Latinos with deceptive advertisements for mortgage modification services and misled Spanish and Portuguese-speaking clients with unrealistic and often false guarantees about securing dramatic loan modifications.
Evidence introduced in the case showed that Zak opened an office in Revere because he believed its Latino community would be “easy targets” and gullible. Zak used radio and written advertisements in Spanish and Portuguese to contact Latino homeowners having difficulty making mortgage payments, falsely claiming to have saved hundreds of Latinos from foreclosure, promising to cut their mortgage payments in half, asserting that he was the only attorney in Massachusetts who knew how to do loan modifications, and boasting that he had a “secret formula” and “magic numbers” unknown to others for obtaining loan modifications. Atty. Zak even hired a “Coordinator of the Latino Market”, who was charged with leveraging her extensive network of contacts in the Latino community to recruit agents and clients, MCAD said.
Hernandez was suspicious from the get-go, he said. After hearing ads on the radio, he admitted it seemed too good to be true. However, Zak was an attorney in good standing and his presentation was very believable.
“At the time, the presentation was very professional and believable,” he said. “Now, I wouldn’t believe it, but it looked real. I was all about the documents and about seeing paperwork and finding out what they had done. They showed me all of this correspondence with banks where they had lowered payments – showing me the before and after payments. There was a whole stack of them I looked at. Now we find out all of that wasn’t true. I looked at all the documents and none of it was real, but I didn’t know that.”
After months of wrangling with Zak’s office for updates and with pressure coming from the banks, Hernandez started to get a bad feeling. He demanded meetings with Zak that were always cancelled, he said. He sent letters numerous times.
Finally, one day he went down to the office and demanded a meeting.
“There were a lot of people waiting and one old lady that didn’t speak English and was only saying, ‘My house, my house,’ and the staff was being very abusive to her,” he said. “I just got a really, really bad feeling the way (Zak) was talking to her with no respect.”
Once forcing his way into the office, Hernandez said he soon got turned away and he knew he had been duped.
“I told him I thought he should finish the job he started for me,” said Hernandez. “He told me ‘I don’t give a (expletive deleted) what you think.’ That stunned me. I had paid him so much money and he’s talking to me like that? I don’t know if I was going to cry or hurt the guy. I just stood there paralyzed. Nobody was there for us; just a bunch of clients looking at each other. He told me to leave. I was crying and I knew I wasn’t the only one.”
The Chelsea Collaborative began to get call after call. They logged 65 complaints against Zak, including one person who had lost $8,000, lost his home and was living in his car.
“This was a great victory for us and a case that, without the Collaborative organizing, would have never been accomplished,” said Collaborative Director Gladys Vega. “When we took this case, [Zak] sued the Collaborative for $2 million dollars for defamation of character and we were found not guilty. And now, three years later, this is the result of all that effort.”
Each case was forwarded to Greater Boston Legal Services (GBLS), which represented the 17 Latino victims.
Nadine Cohen, GBLS lead attorney, stated, “The Latino homeowners who were victimized feel vindicated and are grateful for the opportunity to tell their story and be heard.”
The MCAD’s Waxman also found that Zak charged Latino clients inflated and duplicative fees for services that were available elsewhere for free, encouraged them to intentionally fall behind on mortgage payments, failed to adequately translate documents, misrepresented the status of clients’ cases, performed minimal, substandard work—often failing to secure promised mortgage modifications, refused to provide appropriate refunds, and engaged in threats, intimidation, and demeaning conduct.
Based on the evidence presented at the public hearing, Waxman concluded that Zak’s conduct was discriminatory and awarded $116,600 in compensatory damages to 17 victims and an additional $107,000 in emotional distress damages to 12 complainants. Recognizing the egregious and unlawful nature of Zak’s conduct, he was also assessed a civil penalty of $10,000.
For Hernandez, the money being returned is vindication, but he had to declare bankruptcy, he said, due to Zak’s conduct and no longer owns his home.
“I just wanted an affordable mortgage; I didn’t want to live for free,” he said. “However, the bank said I lost all my legal rights when I filed bankruptcy. They don’t consider me the homeowner any longer and said I had lost the rights to my home. It’s not just me though. That’s the worst part. The $5,600 for me is nothing. There were hundreds of people who paid $12,000 or more. A lot of people were afraid to talk or intimidated by him. I’m glad I did what so many were afraid to do. Whatever happened; it happened, but it’s better to go down fighting, and we fought for this one.”
The Massachusetts Attorney General’s office has a case against Zak and there are on-going proceedings at the Board of Bar Overseers concerning his license to practice law.