Mortgage Relief Firms Agree to Pay $3.6 Million for Alleged Scam

January 14, 2014
Los Angeles Times 
mortgage lending news
To resolve allegations that they scammed homeowners nationwide, a cabal of Florida-based firms and their operators have agreed to pay almost $3.6 million. According to the Federal Trade Commission (FTC), the settlement is the biggest yet obtained by the agency in a crackdown against companies that prey on distressed homeowners eager to reduce their mortgage payments in the wake of the housing crisis.

Jessica Rich, director of the FTC's Bureau of Consumer Protection, charges, "Rather than make good on their promise to offer people relief from mortgage trouble, these schemers put their targets even further behind financially. They broke the law by taking money upfront and making false promises."

The South Florida-based operation used several names, including Prime Legal Plans and American Hardship. Through a national telemarketing campaign in both English and Spanish, the firms pledged to prevent foreclosures and/or substantially reduce mortgage payments. In direct violation of federal law, they demanded upfront fees of as much as $750 per month; meanwhile, clients received little to no assistance.

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