A mortgage relief services company and its owner agreed Thursday to settle allegations that they illegally charged homeowners an upfront fee for help they promised but never provided. The settlement calls for a ban from selling debt relief services under a federal court order.

The settlement resolves allegations that Wealth Educators and Veronica Sesma falsely promised they could lower consumers' mortgage payment or interest rate, or obtain loan modification or restructuring and illegally collected fees before homeowners got a written offer from their lender or servicer that they deemed acceptable. A court had ordered a halt to the alleged violations and frozen the corporate defendant’s assets pending litigation.

The order imposes a $885,677 judgment that represents the total amount of fees taken by the scheme. It will be partially suspended upon surrender of funds in the frozen corporate bank accounts. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

The stipulated court order also prohibits the defendants from making misrepresentations about any products or services, and financial products and services in particular, and from selling or otherwise benefitting from customers’ personal information.

The FTC vote authorizing the staff to file the proposed stipulated final order was 5-0. The order was entered by the U.S. District Court for the Central District of California on Aug. 21.

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