Feds Obtain Judgment Against Southern California Loan Modification Racket For Clipping Homeowners With Upfront Fees & Failing To Deliver On Promises

The Federal Trade Commission recently announced:

• The Federal Trade Commission has put a permanent stop to another mortgage foreclosure “rescue” operation that allegedly promoted bogus loan modification and foreclosure relief services. The case is one of 17 lawsuits the FTC has brought in the past 11 months in a crackdown on mortgage relief frauds that target financially strapped homeowners, and more cases are being investigated. In February 2009, the FTC charged National Foreclosure Relief, Inc. and three of its principals with falsely claiming they would stop foreclosure or fully refund consumers’ money. [...] Many people paid the company up-front fees as high as $1,000, but still ultimately lost their homes to foreclosure. Others avoided foreclosure only through their own efforts. After paying the fee, consumers who contacted the company were often either ignored or falsely told that negotiations with their lenders were under way.

***

• The settlements impose a $12 million judgment, approximately $500,000 of which will be paid from company funds frozen by the court. The full judgment against [former director Chele] Stone [also known as Chele Medina] will become due immediately if she is found to have misrepresented her financial condition. Litigation will continue against the remaining two defendants in the case.(1)

For the FTC press release, see FTC Puts Mortgage Foreclosure "Rescue" Company Out of Business.

(1) For the related court documents, see:

• Stipulated Final Order for Permanent Injunction and Settlement of Claims as to Defendant Chele Stone, a/k/a/ Chele Medina,
• Stipulated Final Order for Permanent Injunction and Settlement of Claims as to Defendant National Foreclosure Relief, Inc.,
• Temporary Restraining Order With Asset Freeze, Appointment of Temporary Receiver and Other Equitable Relief, and Order to Show Cause Why a Preliminary Injunction Should Not Issue and a Permanent Receiver Should Not Be Appointed,
• Complaint for Permanent Injunction and Other Equitable Relief.