The federal government is cracking down on three alleged mortgage relief scams that promise to help cash-strapped borrowers hold onto their homes while delivering little help and driving them deeper into debt.

Prime Legal Plans, American Mortgage Consulting Group, and Expense Management America have lured homeowners with promises ranging from representing them in court to negotiating with lenders on their behalf, according to the Federal Trade Commission in separate lawsuits filed recently in Florida, California and Ohio, the agency announced Tuesday.

"With many homeowners still struggling to hold onto their homes, the FTC takes a hard line against con artists who are seeking their next victim," FTC Chairman Jon Leibowitz said in a news release.

The cases represent an effort by the FTC, the Justice Department and the Department of Housing and Urban Development to halt schemes that target distressed homeowners, according to the agency.

The FTC alleges that since 2010, Prime Legal Plans and its affiliates have enrolled thousands of homeowners who pay as much as $750 a month for representation "from expert foreclosure defense attorneys who will fight their lenders to save their homes from foreclosure or make their mortgage payments more affordable," according to a complaint filed Sept. 24 in U.S. District Court in Miami. The FTC charges Prime Legal, which signs homeowners up for the service via telephone and online, with claiming falsely to be a private charity that works for homeowners who cannot afford legal representation.

Prime Legal did not respond immediately to a request for comment.

The FTC also charges that unsuspecting homeowners have paid American Mortgage Consulting Group and its affiliate, Home Guardian Management Solutions, fees ranging from $1,495 to $4,495 in exchange for a promise to reduce their mortgage payments substantially. "Rather than helping homeowners modify their mortgage loans or avoid foreclosure, defendants dupe distressed homeowners into paying thousands of dollars based on false promises and misrepresentations," the agency alleged in a complaint filed Sept. 18 in U.S. District Court in Santa Ana, Calif. "Indeed, defendants provide little, if any, meaningful assistance to modify homeowners' mortgage loans or prevent foreclosure."

According to the FTC, American Mortgage and Home Guardian signed up thousands of consumers nationwide via telephone calls in which operators told borrowers the federal government paid American Mortgage Consulting to help homeowners.

"My client has made every effort to work with the FTC, cooperating and disclosing all information that they requested, and opening his entire business to the government because he has nothing to hide," Marc Lazo, an attorney for Mark Nagy Atalla, a principal at American Mortgage and Home Guardian, told American Banker. "He legitimately made every effort to help these homeowners by causing their lenders to modify their loans or work out alternative options to allow them to stay in their homes in this continuously declining real estate market and oppressive economic environment."

"Furthermore, he has gone above and beyond what he was paid to do in order to ensure consummation of the loan modifications for their qualified customers," added Lazo, who notes his client has yet to have an opportunity to appear before the court.

In the third lawsuit, the FTC charges that Expense Management America, based in Canada, has called thousands of consumers in the U.S. who are struggling financially with offers to help relieve them of debt. "During defendants' calls with consumers, they offer to solve all of the consumers' financial problems by reducing applicable interest rates, reducing outstanding principal amounts, reducing monthly payments, and generally improving consumers' financial positions," the FTC alleged in complaint filed Sept. 25 in U.S. District Court in Cleveland.

Consumers who enrolled in Expense Management's programs paid the company a fee each month after being told the funds would be used to settle with creditors, according to the FTC. "In numerous instances, consumers enrolled in defendants' programs have suffered significant economic injury, including: monetary losses ranging from $2,200 or lower to $10,000 or higher and receiving little or no service in return; going into foreclosure; and even losing their homes," the agency charged in its complaint.

The company did not respond immediately to a request for comment.

In each case, the government has asked the court to end the schemes, freeze the companies' assets and direct the companies to give up any allegedly unlawful gains. In both the Prime Legal and American Mortgage cases, the courts have issued temporary restraining orders and frozen the companies' assets.

The FTC charges all three companies with failing to disclose information required by the Mortgage Assistance Relief Services rule, which obligates mortgage relief companies to tell borrowers the companies are not associated with the government; that lenders may not agree to modify a loan; and that if consumers stop paying their mortgage they could lose their home and damage their credit rating.

The rule also bars mortgage relief companies from making misleading claims about their services or telling borrowers to stop communicating with their lenders.

The FTC's action continues a string of efforts by regulators to police firms that offer to modify mortgage loans. The Consumer Financial Protection Bureau in August sued a Los Angeles law firm over an alleged debt relief scam. California regulators warned consumers in January to be wary of promises for loan modification.

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