The Federal Trade Commission is suing a national operation with marketing false loan modification services targeting homeowners who are behind in their mortgage payments or facing foreclosure.
Companies being sued by the FTC are U.S. Mortgage Funding Inc., Debt Remedy Partners Inc. and Lower My Debts.com LLC. David Mahler, manager of USMF, Jamen Lachs, director of USMF, and John Incandela Jr., manager of LMD and USMF, are also included in the FTC lawsuit.
According to the FTC’s complaint, the defendants targeted financially distressed consumers using direct mail, the Internet and telemarketing, and falsely promising them to receive loan modifications to make the consumers’ mortgages much more affordable. The fraud scam assured the consumer to reduce monthly payments, interest rates, or convert adjustable rates to fixed.
The FTC’s complaint says that the defendants claim expertise that enables them to prevent foreclosure, and often mislead consumers to believe they are affiliated with, or approved by, consumers’ lenders. The defendants tell the consumers not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments will demonstrate the consumers’ hardship to lenders.
The defendants charged up to $2,600 for their services and typically asked for half of the fee upfront, claiming a success rate of up to 100%.
Homeowners whose lenders have denied them modifications or who have been sent foreclosure notices are promised to receive a loan in this scam. If a modification could not be obtained, the consumer was guaranteed a full refund.
But the FTC claims that in numerous instances, the defendants failed to answer or return consumers’ telephone calls or provide updates about a loan modification that did not occur.
By participating in this scam, these companies and individuals allegedly violated the FTC Act and the FTC’s telemarketing sales rule. In addition, the defendants allegedly violated the telemarketing rule by calling numbers on the national do-not-call registry and did not pay the required annual fee for accessing numbers on this list.
The FTC’s mission is to stop this illegal practice and make the defendants pay refunds to all the consumers.
