Federal and state regulators announced legal action Wednesday against foreclosure relief defendants that used deceptive marketing tactics to collect illegal fees from struggling homeowners.

The Consumer Financial Protection Bureau, Federal Trade Commission and more than a dozen states are involved in the law enforcement sweep, which is part of Operation Mis-Modification.

The CFPB brought charges against three mortgage relief operations, alleging they collected more than $25 million in illegal fees for services that falsely promised to prevent foreclosures or renegotiate troubled mortgages. Fifteen state attorneys general and other state agencies announced 32 similar actions.

The FTC charged six mortgage relief defendants with violating the FTC Act and the Mortgage Assistance Relief Services Rule, now known as Regulation O. The rule bans mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable.

The CFPB is asking for compensation for victims, civil fines and injunctions against the scammers.

"We are taking on schemes that prey on consumers who are struggling to pay their mortgages or facing foreclosure," said CFPB Director Richard Cordray. "These companies pocketed illegal fees—taking millions of hard-earned dollars from distressed consumers, and then left those consumers worse off than they began. These practices are not only illegal, they are reprehensible."

The defendants in the CFPB lawsuits are either law firms or associated with one. The defendants hid their promises of foreclosure relief for struggling homeowners with claims that they were performing legal work, according to the CFPB.

Details on the legal actions brought by the states were not immediately available.

The FTC's action against the six defendants brings the number to 48 actions since 2008 against companies peddling fraudulent mortgage relief. In each case, the FTC has sought an order stopping the illegal practices and freezing the defendants’ assets pending the outcome of the litigation.

"Mortgage relief schemes like these target people who are already having financial problems and, all too often, inflict even further harm on them," said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. "We’re determined to stop operations that illegally charge up-front mortgage relief fees or make empty mortgage relief promises."

The latest companies targeted by the FTC include:

Danielson Law Group: The FTC alleged the Utah-based defendants touted a success rate that exceeded 90% and enticed consumers to pay hefty advance fees ranging from $500 to $3,900 – falsely promising that attorneys would negotiate loan modifications with substantially reduced mortgage payments using their special relationships with lenders or mortgage analysis reports produced by a proprietary software program. The defendants also urged homeowners to stop paying their lenders and promised full refunds if they did not obtain a loan modification, according to the FTC.

A U.S. district court temporarily halted the operation, at the FTC's request. It allegedly took more than $35 million from delinquent homeowners.  

FMC Counseling Services Inc.: The FTC alleged that from at least February 2011, the Fort Lauderdale, Fla.-based operation made false claims that it was affiliated with the federal government’s Making Home Affordable assistance program and that it would renegotiate consumers’ mortgages, reducing them by several hundred dollars. Deceptively using the Federal Deposit Insurance Corporation’s logo and doing business as the "Federal Debt Commission," the "Federal Mortgage Marketplace," and the "Federal Assistance Program," the defendants promised consumers their mortgage modifications would be completed quickly or that they could provide free mortgage refinancing. 

The defendants also told consumers to cease communications with their lenders, and to turn over their mortgage payments while refinancing was pending. 

Collecting more than $600,000 in payments from hundreds of consumers, the FTC alleged the defendants did nothing for consumers and failed to apply any funds received from consumers to their existing mortgages. As a result, many consumers lost their homes as well as their mortgage payments.  

Lanier Law: The FTC alleged that from at least 2011, the Jacksonville, Fla.-based operation typically told consumers that they would get a loan modification or that their chances of getting one was 85% to 100%.

The defendants typically collected an upfront fee of $1,000 to $4,000, or an ongoing monthly fee of $500 or more. In some cases, according to the FTC, they also told consumers not to pay their mortgages while their supposed loan modifications were pending.

Along with charging the Lanier defendants with violating the FTC Act and the Mortgage Assistance Relief Services Rule, the FTC also charged them with violating the Do Not Call Rule by calling consumers who were on the Do Not Call list, and by failing to buy the Do Not Call Registry in any state where they operated.

Mortgage Relief Advocates: The FTC alleged that from at least August 2010, the California-based operation sold fraudulent mortgage assistance services on its Web sites and through telemarketing. The defendants tout their supposedly good relationships with lenders, and falsely claim their “forensic” loan audits will uncover violations in the Truth in Lending Act in 80% of the loans reviewed, and that these supposed violations can be used as leverage in modifying mortgage loans and reversing foreclosures, according to the complaint.
Charging an upfront fee of $1,000 to $3,200, the defendants are alleged to have rarely provided the promised mortgage relief.  

Home Relief Foundation: The FTC alleged that from approximately October 2010 to December 2013, the Austin, Texas-based operation preyed on financially distressed homeowners nationwide by making false promises that because of their affiliation with attorneys, their affiliation with a government program, their knowledge of the industry and their relationships with mortgage lenders, Home Relief Foundation would be able to lower consumers’ interest rates and monthly mortgage payments.  The defendants also allegedly told consumers to stop paying their mortgages – without disclosing that if they did so, consumers could face bankruptcy, risk losing their homes, or damage their credit ratings. 

Charging advance fees ranging from $500 to $4,000, the defendants collected more than $500,000 during the course of their operation, according to the complaint.   

CD Capital Investments: The FTC alleged that from mid-2011, the California-based operation often promised consumers would receive mortgage relief services within two to four months, and often claimed affiliation with the Obama Administration’s "Making Home Affordable Program," with some other government entity, or with the consumer’s lender or servicer.

They told some consumers they would receive a lower fixed-interest rate, a reduction in their mortgage payment, or a reduction in the principal balance of their mortgages, according to the complaint.

Telling consumers that lenders or servicers would not foreclose on their homes if they were in the process of obtaining a loan modification, and urging some not to pay their monthly mortgage payments or communicate with their lender or servicer, the defendants collected more than $1 million in revenues – by charging upfront fees of $495, supposedly to process the consumer’s application and monthly fees that averaged about $399, for what they called “post application monitoring,” the FTC alleged.

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