The Consumer Financial Protection Bureau, the Federal Trade Commission and 15 states are filings 9 lawsuits against companies and individuals that collected more than $25 million in illegal advance fees with false promises to prevent foreclosures. The CFPB is filing 3 lawsuits, while the FTC is filing 6 lawsuits.
This giant sweep against foreclosure relief scammers is an effort to seek compensation for victims, civil fines, and injunctions against the scammers.
In addition, the states are taking 32 actions.
“We are taking on schemes that prey on consumers who are struggling to pay their mortgages or facing foreclosure,” said CFPB Director Richard Cordray.
“These companies pocketed illegal fees — taking millions of hard-earned dollars from distressed consumers, and then left those consumers worse off than they began. These practices are not only illegal, they are reprehensible,” Cordray added.
There were three lawsuits filed:
1. The first lawsuit names Clausen & Cobb Management Company and owners Alfred Clausen and Joshua Cobb, as well as Stephen Siringoringo and his Siringoringo Law Firm.
2. The second lawsuit is against The Mortgage Law Group, the Consumer First Legal Group, and attorneys Thomas Macey, Jeffrey Aleman, Jason Searns, and Harold Stafford.
3. The third lawsuit is against the Hoffman Law Group, its operators, Michael Harper, Benn Wilcox, and attorney Marc Hoffman, and its affiliated companies, Nationwide Management Solutions, Legal Intake Solutions, File Intake Solutions, and BM Marketing Group.
The three groups are charged for allegedly violating Regulation O, formerly known as the Mortgage Assistance Relief Services Rule, which generally bans mortgage assistance relief service providers from requesting or receiving payment from consumers for mortgage modifications before a consumer has signed a mortgage modification agreement from their lender.
Some of the defendants are also charged for violating the Dodd-Frank Wall Street Reform and Consumer Protection Act, which generally prohibits deceptive practices in the consumer financial market.
In order to prevent future foreclosure relief scams, the bureau released a Consumer Advisory guide to help consumers recognize red flags.