Consumer Financial Protection Bureau and Federal Trade Commission filed nine lawsuits against individuals and companies that collected at least $25 million in illegal advance fees for mortgage-relief services.
Fifteen states took 32 additional actions against foreclosure-relief scammers that CFPB says used deceptive marketing tactics to defraud thousands of U.S. homeowners.
According to CFPB’s three lawsuits, each of the scammers was a law firm or was associated with one, and those defendants charged illegal upfront fees for promised mortgage modifications that never were performed.
CFPB says companies legally can’t accept payment for mortgage modifications for a consumer before he/she has a modification agreement in place with a lender. The three defendants charged advance fees and typically stopped corresponding with distressed homeowners after the defendents pocketed the illegal fees.
CFPB filed lawsuits against the following defendants and sought civil fines, compensation for victims and injunctions against them:
* Clausen & Cobb Management and Siringoringo Law Firm, which CFPB says charged advance fees that ranged from $1,995 to $3,000, in addition to monthly fees of $495, to thousands of distressed homeowners in California.
* Mortgage Law Group and Consumer First Legal Group, which CFPB says took in at least $19.2 million in illegal advance fees from at least 10,000 homeowners nationwide.
* Hoffman Law Group, which the agency says typically charged consumers an upfront fee of $6,000, plus a $495 monthly maintenance fee.
FTC filed similar lawsuits against six mortgage-relief operations: CD Capital Investments, Danielson Law Group, FMC Counseling Services, Home Relief Foundation, Lanier Law and Mortgage Relief Advocates. The agency says the companies collected illegal advance fees that ranged from $500 to $4,000.