December 11, 2014

A federal court has entered orders against 22 mortgage company defendants who offered financially strapped consumers fake home-loan modification services that the FTC claims violated the FTC Act and the Mortgage Assistance Relief Services Rule. The FTC alleged the defendants operated as two loan modification enterprises, each of which falsely claimed it would provide legal help to save consumers’ homes from foreclosure and lower their mortgage payments. The enterprises then charged up-front fees of between $2,500 and $3,500, but delivered little or no help, deepening the consumers’ financial distress. The orders impose monetary judgments in varying amounts to remedy the almost $51 million of consumer injury from the defendants’ activities and collectively ban the defendants from advertising, promoting, or selling unsecured debt relief products and services; misrepresenting any material facts related to financial products or services; misrepresenting material facts related to any other types of services; and benefiting from any consumer information they collected through the scheme. FTC