Feds, Florida Foreclosure Rescue Operators Settle Civil Charges Of TILA, HOEPA Violations

The Federal Trade Commission recently announced:

• Two individuals who lured homeowners into high-cost, short-term loans secured by an additional mortgage on their homes have settled FTC charges that they violated federal law – and a previous court order against them. Thomas C. Little, an attorney, also settled contempt charges based on his role in facilitating the scam. The Commission sued them and seven other defendants in February 2008 as part of an ongoing effort to crack down on businesses that prey upon homeowners facing foreclosure.

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• The settlements with Christopher Tomasulo and Bonnie Werner (formerly Bonnie A. Harris) resolve these charges and impose judgments of $2,791,040.40 each, which will be suspended based on their inability to pay. The full judgments against them will become due immediately if they are found to have misrepresented their financial condition.(2)

For the entire press release, see Mortgage Foreclosure ‘Rescue’ Defendants Settle FTC Charges for Deceiving Homeowners.

For links to copies of the initial lawsuits, the settlements, and the related press releases, see:

• FTC v. Safe Harbour Foundation of Florida, Inc., et al., and
• FTC v. Bay Area Business Council, Inc., et al.

(1) The defendants allegedly violated the Home Ownership and Equity Protection Act (HOEPA) by extending credit based on the value of consumers’ collateral without regard to their repayment ability, by requiring balloon payments after only six months, by providing negatively amortized loans that cause consumers to owe more at the end of the loan than at the beginning, and by failing to make required disclosures. The defendants also allegedly engaged in a number of violations of the Truth in Lending Act (TILA).

(2) Other defendants in these cases are: Silverstone Lending, LLC, a Florida limited liability company; Silverstone Financial LLC, a Florida limited liability company; Keystone Financial, LLC, a Nevada limited liability company; Southeast Advertising, Inc., a Florida corporation; MT25 LLC, a Nevada limited liability company; and Peter J. Porcelli, II, individually and as officer, partner, or member of Silverstone Lending, LLC, Silverstone Financial LLC, and Safe Harbour Foundation of Florida, Inc..