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.