A Florida-based mortgage modification business and its owner are banned from the industry as part of a settlement resolving Federal Trade Commission charges that he tricked financially strapped consumers into paying for mortgage-relief services that he never provided.

Jonathan Herbert and his Fort Lauderdale, Fla.-based operation falsely claimed an affiliation with the federal government’s Making Homes Affordable assistance program, promising to renegotiate consumers' mortgages to reduce monthly payments by several hundred dollars, according to the FTC's complaint. The FTC alleged that Herbert hid his involvement in the scam through the use of stolen identities, shell corporations and other ruses.

Although Herbert and his companies collected more than $800,000 in payments from hundreds of consumers, they made no effort to obtain loan modifications and did not apply any of the money to pay down consumers' existing mortgages. As a result, many consumers lost their homes, as well as thousands of dollars.

The operation deceptively used the Federal Deposit Insurance Corporation's (FDIC) logo and called itself the "Federal Debt Commission," the "Federal Mortgage Marketplace" and the "Federal Assistance Program." Herbert’s companies promised consumers their mortgage modifications would be completed quickly and for free. They further told consumers to stop communicating with their lenders, and to send their "new" mortgage payments to addresses in Washington, DC, which turned out to be UPS Stores, not government office buildings. These payments were then forwarded to Herbert in Florida.

"Years after the economic meltdown, the FTC is still exposing and shutting down bogus mortgage relief schemes," said Jessica Rich, director of the Bureau of Consumer Protection. "This case highlights the depths to which scammers will sink to defraud struggling homeowners, and our resolve to hold them accountable."

The court order settling the charges imposes a judgment of $815,865. It bans Herbert for life from any involvement with all debt-relief programs, including mortgage loan modifications. The order prohibits him from misrepresenting any aspect of a financial product or service or the terms and conditions associated with such products or services.

The defendants are not allowed to disclose any of the consumer information obtained through their fraudulent operations and the order prohibits anyone associated with them from collecting payments from consumers who agreed to buy the fake mortgage relief services.

The court order announced Monday settles the FTC’s charges against: FMC Counseling Services Inc.; FDC Assoc Group Inc.; FDC Businesses Inc.; FMC Review Corporation, NDR Group Inc.; FMC Consultants Group Inc., and Jonathan L. Herbert, individually and doing business as Federal Debt Commission Inc; FDC Financial Inc. and FDC Consultants Inc.

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