The Federal Trade Commission announced Friday law enforcement actions against several scams that targeted homeowners behind in their mortgage payments or facing foreclosure.

Federal courts, at the FTC's request, halted two bogus mortgage relief operations that posed as government mortgage assistance programs, pending trial, and reached settlements with several other individuals and companies. Also, more than a dozen marketers were banned from selling mortgage loan modification and foreclosure relief services under court judgments and settlements in several previously filed law enforcement actions.

The FTC charged another mortgage relief operation with contempt for violating 2008 court orders. All of these cases involved false claims that the defendants can obtain "dramatically" lower mortgage interest rates in exchange for upfront fees.

"We’re serious about stopping con artists who prey upon financially distressed homeowners, and we’ll be bringing more of these cases," says FTC Chairman Jon Leibowitz.

FTC Complaints

U.S. Homeowners Relief: According to the FTC, four companies and six individuals touted a "Government Mortgage Relief Program" that would reduce mortgage payments as part of the “Obama Act" or the “federal stimulus program,” falsely claiming an affiliation with the government. Claiming a 90% or higher success rate, they promised that, in return for a fee of up to $4,250, they could reduce consumers" monthly mortgage payment and lower their interest rates and principal amounts, or both.

The defendants promised to offer full refunds if they failed to obtain loan modifications. The FTC alleged that once consumers paid the fee, they received nothing, did not get refunds, and the defendants stopped responding to calls or e-mails, disconnected their phone numbers and changed the name of their business while continuing to make promises and take money from consumers.

At the FTC’s request, a federal court halted the operation and froze the defendants’ assets, pending trial. The FTC seeks to stop the defendants’ deceptive claims and make them forfeit their gains. The FTC complaint alleges that the defendants claimed to have established relationships with lenders that enabled them to obtain loan modifications on good terms.

The defendants are U.S. Homeowners Relief Inc.; Waypoint Law Group Inc.; American Lending Review Inc.; New Life Solutions Inc.; D.G.C. Consulting LLC; DLD Consulting LLC; Samuel Paul Bain; Macie Mejeco Bain, also known as Macie Mejeco Manns; Aminullah Sarpas, also known as Amin Sarpas and David Sarpas; and Damon Grant Carriger.

They are charged with violating the FTC Act and the FTC’s Telemarketing Sales Rule by falsely claiming that people who purchase their services are highly likely to obtain a mortgage loan modification that will make their payments much more affordable, that they are the U.S. government or affiliated with the federal government, and that they will refund consumers’ money if they do not obtain a loan modification.

The complaint was filed in the U.S. District Court for the Central District of California, Southern Division. On Sept. 28, a federal judge entered a temporary restraining order that, pending a hearing, halted U.S. Homeowners Relief’s business practices, froze the defendants’ assets, appointed a receiver to manage their businesses and allowed the FTC and the receiver immediate access to the defendants’ business premises.

Residential Relief Foundation: The FTC alleges that the defendants falsely claimed their loan modification program could result in waiver of late payments, late fees and legal fees; conversion of adjustable rates to fixed rates as low as 1%; reduction of principal balance; and up to 40% lower mortgage payments. They used a logo similar to the Great Seal of the United States and told consumers that it is nearly impossible for homeowners to obtain mortgage modifications on their own.

Claiming quick results and a high success rate, the defendants charged a $1,495 upfront fee, advised people to stop making mortgage payments and falsely claimed that reports they create would enable them to obtain the promised results, according to the FTC’s complaint. They also allegedly improperly disposed of consumers’ information in unsecured dumpsters.

Finally, the FTC charged that in marketing debt relief services for credit card debt, the defendants falsely told people they could become debt free in 12 months to 36 months, remove late fees and penalties, and reduce debts up to 50%.

A federal court halted the operation, appointed a receiver and froze the defendants’ assets, pending trial. The FTC wants to stop the defendants’ claims permanently and make them forfeit gains resulting from the program.

The defendants are Residential Relief Foundation Inc., Silver Lining Services LLC, Mitigation America LLC, Michael Valenti, Bryan Melanson, Jillian Melanson, Dennis Strzegowski and James Holderness, also doing business as the Law Office of James Holderness.

They are charged with violating the FTC Act and the FTC’s Telemarketing Sales Rule by falsely claiming they would obtain loan modifications and significantly lower mortgage payments for consumers and that reports they create would enable them to do so. They also are charged with misrepresenting an affiliation with the federal government, falsely claiming to have taken reasonable and appropriate measures to protect consumers’ personal information from unauthorized access and improperly disposing of consumers’ information in unsecured dumpsters, in violation of the FTC Act.


The FTC announced it reached settlements with several defendants charged with unlawful practices in four actions filed in 2009. Along with banning the defendants from the mortgage relief business, the settlement orders permanently prohibit them from misleading consumers about goods and services. That includes falsely claiming to be affiliated with the government, misrepresenting loan or refund terms and misrepresenting their ability to improve someone’s credit history. The orders prohibit them from selling or otherwise disclosing customers’ personal information.

National Foreclosure Relief: David Ealy and Hugo Tapia settled charges that they falsely claimed their “Fresh Start Program” would stop foreclosure or they would fully refund consumers’ money. The FTC’s complaint alleges that many consumers paid National Foreclosure Relief Inc. advance fees of up to $1,000 but ultimately lost their homes to foreclosure. Others avoided foreclosure only through their own efforts.

After paying the fee, consumers who contacted the company for information regarding the status of purported modifications were often either ignored or falsely told that negotiations with their lenders were taking place.

The settlement against Ealy and Tapia also bars them from enforcing any contracts with mortgage relief clients, and imposes a $12 million judgment against both that will be suspended when the defendants surrender all funds in bank accounts frozen by the court. The full amount of the judgments will become due immediately if the defendants are found to have misrepresented their financial condition.

U.S. Foreclosure Relief: Attorney Brandon Moreno and his law firm, Cresidis Legal, settled charges brought by the FTC and the states of California and Missouri that they allegedly falsely claimed they would get loan modifications for consumers or refund their money, that a lawyer would negotiate the terms of consumers’ home loans with lenders and that they successfully obtained modifications for at least 85% of their clients. More than $614,000 obtained from the eight settling defendants in this matter will be returned to 995 consumers.

The settlement order against Moreno and Cresidis Legal also bars them from violating the FTC’s Telemarketing Sales Rule and enforcing any contracts with mortgage relief clients and imposes a $1.8 million judgment that is suspended upon Cresidis Legal’s surrender of approximately $131,000 to the court-appointed receiver. The full judgment will become due immediately if the defendants are found to have misrepresented their financial condition.

Federal Housing Modification Department Inc., Michael Trap, Glenn Rosofsky and Bryan Rosenberg settled FTC charges that they misrepresented themselves as a federal government agency or affiliate and falsely claimed that, in return for a $3,000 fee – typically with half due upfront and half due two weeks later – they would get lenders to modify consumers’ mortgages, substantially lowering their loan payments in virtually every instance.

According to the FTC, the defendants misled consumers into believing they were dealing with a real government program, Making Home Affordable, that provides free mortgage loan assistance. They claimed a 90% success rate, that only selected customers meeting certain conditions could qualify for modification assistance and that Federal Housing Modification Department had attorneys and forensic accountants on staff. The FTC complaint charged that very few homeowners actually received modifications, but the defendants accepted the advance fees from almost all applicants, and they had neither lawyers nor accountants on staff.

The settlements bar them from violating the FTC’s Telemarketing Sales Rule and require them to dispose of customers’ sensitive personal customer information. Each settlement imposes a $900,000 judgment that will be suspended based on their inability to pay. The full judgments will become due immediately if they are found to have misrepresented their financial condition.

Rosofsky and Trap have pleaded guilty to federal criminal conspiracy and money laundering charges. These charges, filed by the U.S. Attorney’s office in the federal district court in San Diego, arose from Trap and Rosofsky’s activities on behalf of Federal Housing Modification Department.

Crowder Law Group, formerly known as Jackson, Crowder & Associates, PA and doing business as Legal Support Services; Optimum Business Solutions LLC, also known as Attorney Finance Services LLC and doing business as Attorney Finance Services; Bruce Meltzer; and Kathleen Lewis, also doing business as Kathy Lewis, all settled charges that they misrepresented themselves as a federal government agency or affiliate and charged a $2,000 upfront fee for services they did not perform.

Their personalized postcards to consumers stated, “You may qualify under the new government bailout to refinance your current mortgage . . . .” Some postcards described the defendants’ programs as federal programs and were signed by an attorney in the consumer’s state.

The settlement orders against these defendants prohibit them from violating the FTC’s Telemarketing Sales Rule, trying to collect payment from their customers, and failing to properly dispose of customer information. The orders against Crowder Law Group and Bruce Meltzer, and Optimum Business Solutions and Kathleen Lewis impose a $3.1 million judgment that will be suspended upon the surrender of funds in corporate bank accounts. Litigation continues against Washington Data Resources Inc., Brent McDaniel, Tyna Caldwell, Douglas A. Crowder, and Richard A. Bishop.

Court Judgment

Dinamica Financiera: A summary judgment entered by the court included a $3.7 million judgment against Dinamica Financiera LLC, Valentin Benitez and Jose Mario Esquer; a $1.3 million judgment against Soluciones Dinamicas, Inc., Valentin Benitez, and Jose Mario Esquer; and a $394,000 judgment against Oficinas Legales de Eric-Douglas Johnson, Inc., Valentin Benitez, and Eric Douglas Johnson.

The defendants falsely promised Spanish-speaking consumers who were behind on their mortgage payments that they would stop foreclosure or obtain mortgage loan modifications. They charged an upfront fee equivalent to each consumer’s monthly mortgage payment, but often failed to live up to their promises. Many people who paid them did not obtain modifications and ultimately lost their homes.

Contempt Action

Nationwide Financial Aid and Northern Federal Aid
: The FTC filed a civil contempt action against Everard Taylor, Elias Taylor, Ebony Taylor and National Financial Assistance LLC, alleging that they misled consumers with foreclosure rescue claims in violation of previous court orders imposed on Everard Taylor and Elias Taylor.

Court orders entered in March and September 2008 prohibited Everard Taylor and Elias Taylor, and anyone who participates with them, from misrepresenting that they would stop, postpone or prevent foreclosure, and from misrepresenting the terms of a refund policy. Despite the court orders, the FTC alleges that Everard Taylor, Elias Taylor, and Everard’s wife, Ebony Taylor, operated another mortgage relief scam using the names Nationwide Financial Aid and Northern Federal Aid.

The FTC seeks to modify the previous orders to ban Everard Taylor and Elias Taylor from selling mortgage loan modification and foreclosure relief services and make them pay at least $126,000 for consumer refunds.

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