Deceptive Mortgage Loan Modification Scam That Targeted Financially Distressed Homeowners Shut Down

In many instances, consumers paid hundreds or thousands of dollars and got nothing in return

Deceptive Mortgage Loan Modification Scam That Targeted Financially Distressed Homeowners Shut Down
Image: Pexels
January 24, 2018

A mortgage loan modification operation that preyed on financially distressed homeowners has been stopped.

The Federal Trade Commission (FTC) charged the operation with deceiving homeowners by falsely promising to prevent foreclosure and make their mortgage payments more affordable. A federal court temporarily halted the scheme and froze the defendants' assets at the FTC's request.

False Promises and success rates

According to the FTC, the defendants typically charged consumers $3,900 in unlawful advance fees, in $650 monthly installments, falsely promising expert legal assistance and touting a 98-100 percent success record. They also allegedly misrepresented they would cut homeowners' interest rates in half and reduce their monthly mortgage payments by hundreds of dollars.

The FTC says that the defendants used doctored government logos in correspondence with consumers, falsely suggesting they were affiliated with or endorsed by the federal government's Making Home Affordable loan modification program. They also claimed to have special relationships with particular lenders and unlawfully told consumers not to pay their mortgages to or communicate with their lenders.

consumers paid thousands for Nothing

In many instances, consumers paid hundreds or thousands of dollars only to learn that the defendants had not obtained the promised loan modifications, and in some cases had never even contacted the lenders.

As a result, according to FTC allegations, many people incurred substantial interest charges and other penalties for paying the defendants instead of their mortgage payments, and some lost their homes to foreclosure.

The Defendants

The defendants in this case, charged with violating the FTC Act and the Mortgage Assistance Relief Services Rule, are: Preferred Law PLLC; Consumer Defense LLC (Nevada); Consumer Defense LLC (Utah); Consumer Link Inc.; American Home Loan Counselors; American Home Loans LLC; Consumer Defense Group LLC, formerly known as Modification Review Board LLC; Brown Legal Inc.; AM Property Management LLC; FMG Partners LLC; Zinly LLC; Jonathan P. Hanley; Benjamin R. Horton; and Sandra X. Hanley.

Avoiding mortgage Relief scams

Get more information about avoiding mortgage and foreclosure rescue scams.