Home Relief Foundation Inc., based in Austin, Texas, and its two owners have settled Federal Trade Commission charges that they illegally charged upfront fees for services they falsely promised would reduce consumers’ mortgage interest rates or monthly payments. 

The complaint alleges the defendants often told consumers that they could afford the defendants’ fees by stopping payment of their mortgages – without disclosing that if they did so, consumers would risk losing their homes or damage their credit ratings. The defendants illegally charged fees ranging from $500 to $4,000, with the typical charge being approximately $2,550.

The settlement order prohibits the defendants from selling debt relief products or services and from misrepresenting any material facts related to the sale of any products or services. The order imposes a judgment of $1,270,439 that represents the total amount of consumer injury during the three-year operation. The judgment will be partially suspended because of the defendants’ inability to pay, after they have paid the FTC approximately $68,000."The economic meltdown may be over, but scammers are still taking advantage of people struggling to pay their mortgages," said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. "As long as phony mortgage relief operations keep breaking the law and ripping off distressed homeowners, we’ll go after them and shut them down."

The FTC’s complaint was filed in mid-2014, as part of a six-case sweep targeting phony mortgage relief services. It alleges the operation preyed on financially troubled homeowners by making promises that they would be able to lower consumers’ interest rates and monthly mortgage payments. The operation cited the defendants’ affiliation with attorneys, connection to a government program, knowledge of the industry and relationships with mortgage lenders.

The stipulated court order settling the FTC’s charges bans the defendants from advertising, marketing, promoting or selling any secured or unsecured debt relief product or service; prohibits them from misrepresenting information to consumers regarding any financial products or services, and broadly prohibits misrepresentations related to any products or services.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.