A federal court banned three men and their company from the mortgage modification business and ordered them to pay nearly $19 million for consumer refunds, according to terms of a settlement with the Federal Trade Commission.

The defendants allegedly deceived distressed homeowners with phony claims that they would negotiate with lenders to modify their mortgages and make them more affordable.

The FTC sued First Universal Lending LLC; its owners, Sean Zausner, David Zausner; and attorney David J. Feingold, in November 2009 as part of Project Stolen Hope, a continuing federal and state crackdown on mortgage foreclosure rescue and loan modification scams. The defendants encouraged homeowners to stop making mortgage payments, saying lenders would not negotiate unless they were at least a few months behind in their payments, as alleged in the FTC’s complaint.

After charging consumers up to $7,000 in upfront fees, the defendants often did little or nothing to help them, the agency charged. The court subsequently halted the defendants’ operation, froze their assets and ordered them to disable their Web sites and computers.

Along with imposing a judgment of more than $18.8 million against the defendants, the settlement order bans them from the mortgage relief services business. It also permanently prohibits the defendants from misrepresenting material facts about any good or service, violating the Telemarketing Sales Rule, selling or using customers’ personal information, failing to properly dispose of customer information, and collecting payments from their customers.

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