The Federal Trade Commission ordered Los Angeles-based Wealth Educators and its president to stop offering mortgage-relief services.

The agency was charged for failing to provide the help it promised homeowners, while charging a hefty up-front fee and causing some to face the prospect of foreclosure.  

“It’s illegal to charge an up-front fee for the promise of a mortgage modification,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Companies offering such services can’t charge a fee until you have an acceptable written offer from your lender or servicer. If they ask for payment first, walk away.”

According to the release, the defendants used outbound telemarketing to pitch their programs to consumers. Many of the targeted consumers were homeowners in financial trouble, whom the company promised it could help by lowering their monthly mortgage payment, lowering their mortgage interest rate, or obtaining loan modification or restructuring.

Additionally, the defendants also used websites allegedly set up by Veronica Sesma, the owner and president of Wealth Educators, to advertise the supposed mortgage relief services.

The defendants were charged with violating the FTC Act and the Mortgage Assistance Relief Services Rule, now known as Regulation O. The Rule bans mortgage foreclosure rescue and loan modification service providers from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable.

As a result, the FTC is seeking an immediate halt to the defendants’ allegedly deceptive conduct, along with an asset freeze to ensure the preservation of funds for possible consumer redress.