FTC Targets Three In Civil Suits Variously Alleging Forensic Mortgage Audit Ripoffs, Loan Modification Scams, Rackets Claiming To: Be Attorneys, Have Gov't Affiliations, Be Private Charities

The Federal Trade Commission recently announced:

• The Federal Trade Commission has filed three separate suits in federal court to halt the allegedly deceptive tactics of three operations that preyed on distressed homeowners by falsely claiming they could save their homes from foreclosure, and then charging them thousands of dollars up-front, while delivering little or no help and often driving them deeper into debt.

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• In all three cases [...], the FTC took action against defendants who allegedly peddled bogus mortgage relief services, in violation of the FTC Act and the MARS Rule. The agency also charged that two of the operations violated the Telemarketing Sales Rule.
  
  Prime Legal Plans/Reaching U Network [go here for lawsuit]. The FTC alleged that from at least mid-2010, the defendants behind this scheme marketed mortgage relief services in English and Spanish, including under the names “Reaching U Network,” and “American Legal Plans.” They allegedly told consumers who were in debt that attorneys would review their mortgage loan documents to see if their lenders complied with state and federal mortgage laws, and would use the resulting “forensic audit” information to help save their homes and negotiate more favorable mortgage terms. The defendants told consumers that “80 percent of mortgages contain some fraud,” and “Our network attorneys have helped hundreds of Americans stay in their homes,” according to the FTC complaint.
  
  But instead of helping consumers, the defendants charged them up to $750 a month, while little or nothing was done to save their homes from foreclosure, and running an operation that a court found was “permeated with illegal practices” , according to the FTC.
  
  The FTC alleged that on company websites, the defendants would falsely claim to be a “private charity working for struggling consumers that can’t afford legal representation.”

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• American Mortgage Consulting Group [go here for lawsuit]. The FTC alleged that since early 2011, the defendants claimed a phony affiliation with the U.S. government, pretended to be attorneys, and promised to substantially lower monthly mortgage payments in exchange for an up-front fee ranging from $1,495 to $4,495. Along with two companies he controls – American Mortgage Consulting Group, LLC and Home Guardian Management Solutions, LLC – defendant Mark Nagy Atalla allegedly violated “nearly every provision of the Mortgage Assistance Relief Services Rule.”
  
  The defendants telemarketed mortgage relief services to consumers nationwide, often stating that they were paid by the federal government to assist homeowners and obtain so-called “Home Saver” grants from the government to reduce consumers’ up-front fees, according to the FTC’s complaint. They also allegedly proclaimed themselves to be “a California Professional Legal Team,” sent documents to consumers from their so-called “Legal Department,” and referred to their operation in e-mails as a “law office.”

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• Expense Management America [go here for lawsuit]. Presenting themselves as the solution to all the consumer’s financial problems, the defendants have cold-called thousands of U.S. consumers from their call center in Montreal since at least mid-2010, including those whose numbers were registered on the Do Not Call Registry, according to the FTC complaint.
  
  Whether the consumer was struggling with a mortgage, credit card debt, student loans, car payments, or a poor credit score, the defendants charged an up-front fee of $2,200 to $10,000 that they claimed was being used to pay off debts, according to the complaint. The defendants allegedly claimed that their relationships with lenders and their ability to negotiate on behalf of large groups of consumers made it possible to substantially reduce their payments. But according to the FTC, the defendants failed to produce any of the promised results.

For the FTC press release, see FTC Cracks Down on Phony Mortgage Relief Schemes (Victimizing Thousands of Consumers, Marketers Allegedly Falsely Claimed They Could Help, But Instead Drove Distressed Homeowners Deeper into Debt).