Monday, December 19, 2011

Feds, Six Defendants Settle Civil Suit Alleging Upfront Fee Loan Modification Ripoffs, Foreclosure Relief Racket

From the Federal Trade Commission:

  • Six defendants have agreed to settle Federal Trade Commission charges that they participated in a fraudulent mortgage modification and foreclosure relief scheme. The settlement orders require five defendants to pay back millions in ill-gotten gains, and permanently ban all six from selling any mortgage assistance or debt relief products. The settlements with the U.S. Homeowners Relief defendants are part of the agency’s ongoing crackdown on frauds targeting consumers in financial distress.

  • Acording to the complaint filed last year by the FTC, the defendants touted a “Government Mortgage Relief Program” that would supposedly reduce mortgage payments as part of the “Obama Act” or the “federal stimulus program,” even though the defendants had no affiliation with the government.

  • Claiming a 90 percent or higher success rate, they charged consumers up to $4,250 and promised to reduce their mortgage payments, their interest rates, and sometimes even their principal loan amounts.

  • The FTC also alleged that although the defendants promised full refunds if they were unsuccessful, once consumers paid the fee, they received nothing, did not get refunds, and the defendants did not respond to their calls or e-mails.

  • According to the complaint, the defendants disconnected their telephones and changed the name of their business while continuing to make promises and take money from other consumers.

For the entire FTC press release, see FTC Settlement Requires "U.S. Homeowners Relief" Defendants to Pay Millions, Bans Them from Debt and Mortgage Relief Business.

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