CFPB Sues California Law Firm Over Alleged Debt-Relief Scam

American Banker
August 2, 2012
Berry, Kate

The Consumer Financial Protection Bureau (CFPB) recently filed its first civil enforcement order against a Los Angeles law firm that charged homeowners for loan modification services that were never provided. According to the regulator, attorney Chance Gordon, his law firm and two subsidiaries preyed on financially strapped borrowers by promising to lower their monthly mortgage payments in exchange for upfront fees of between $2,500 and $4,500. The CFPB said that after the fee was paid, consumers saw "little, if any, meaningful assistance to modify homeowners' mortgage loans or prevent foreclosure." The July 18 complaint in the U.S. District Court for the Central District of California also asked to halt the firm's operations. The judge granted the request to issue a temporary restraining order against the firm and appointed a receiver to take possession of it and its affiliates. The CFPB joins several other regulators, including the Federal Trade Commission, that are targeting lawyers in debt-relief scams.
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