The Federal Trade Commission Stops Large Mortgage Relief Scam
According to a recent article published by Housingwire, the Federal Trade Commission stopped a large mortgage relief scheme enacted by a variety of lawyers. These attorneys were said to have promised homeowners that they would help save their homes in exchange for legal fees.
The Federal Trade Commission states that these California firms deceived homeowners who were faced with foreclosure by convincing them that they could participate in a large lawsuit against mortgage note holders that did not provide monetary relief or discharge for their mortgage. Unfortunately, these homeowners never obtained relief.
The complaint stated that the attorneys involved in this deceitful act would file lawsuits against lenders for mortgage fraud and void the mortgage notes of consumers. To do so, the lawyers stated that borrowers could participate in mass joinder suits, which are different from class action lawsuits in that they require each participating individual to prove their case independently. The Federal Trade Commission found that the lawyers never won these cases and failed to pursue such cases.
Additionally, the complaint stated that this group of attorneys mailed various marketing supplies to various consumers with the loan amounts, property identification numbers, and the homeowner’s name with statements that threatened homeowners to take action. Additionally, these letters stated that failure to do so would result in a home auction.
Individuals who responded to such marketing materials were told they could recover a minimum of $75,000. Then, if a consumer had a good case, the group of lawyers charged the consumers thousands of dollars in recurring fees but did not deposit the feeds into the consumer’s trust accounts, as they were required to do by law.
The Federal Trade Commission stated that the lawyers failed to tell their clients when their lawsuits were dismissed but continued to collect recurring fees from those clients. The clients were ignored and refused refunds. As a result, the group of attorneys collected no less than $15 million in dishonest funds.
As of now, the federal court has stopped the scheme, and the Federal Trade Commission is working diligently to stop these illegal practices and retrieve refunds for the consumers deceived by these practices.
To read more about this case, visit this article.