Three schemes that promised to help consumers resolve mortgage and debt problems were shut down by the Federal Trade Commission as part of settlements for falsely claiming an affiliation with government assistance programs.
The defendants are banned from marketing or helping others to market any mortgage assistance relief product or service; prohibited from misrepresenting the available terms or rates for financial products and the potential to improve a consumer’s credit history or ability to obtain credit; prohibited from representing the benefits of financial products without competent and reliable evidence to substantiate their claims; and prohibited from making misrepresentations about any good or service, including claims of an affiliation with any government entity or program.
Truman Foreclosure Assistance LLC: The FTC alleged that the defendants bilked consumers out of thousands of dollars for phony mortgage relief and foreclosure rescue services. Settlement orders with two of the men behind the operation require them to pay $1.8 million, and ban them from marketing or helping others to market any mortgage relief and foreclosure rescue service.
The complaint against Truman Foreclosure Assistance, Eli Hertz, Benzion Jack Itzkowitz and Richard Zafrani, along with several other defendants, was filed as part of a 2009 law enforcement sweep called "Operation Stolen Hope." The agency alleged that the Truman defendants charged upfront fees from $1,500 to $3,000, falsely claiming that for all or most consumers they could get their mortgage modified or stop their homes from being foreclosed.
They claimed a 90% success rate and a 100% money-back guarantee. But in many instances, after consumers paid the initial fees, the defendants failed to provide information about the status of their communication with the consumers’ lenders; failed to contact the consumers’ lenders or obtain mortgage loan modifications; and denied refunds to homeowners for whom they failed to obtain modifications, according to the FTC.
The settlement also prohibits Hertz and Itzkowitz from sharing or using customer information, such as Social Security numbers or bank account information, and requires the information to be destroyed.
Fedmortgageloans.com: In this case, the defendants marketed debt relief services as well as mortgage assistance relief services, and the settlement bans them from marketing or helping others to market both mortgage assistance relief and debt relief products or services.
In June 2010, the FTC charged the two corporate defendants and two individuals in this case with misrepresenting that the mortgage assistance and debt relief programs they marketed online were affiliated with the federal or state government, and that consumers were eligible for a federal or state government loan modification or debt relief program.
According to the complaint, the defendants used fedmortgageloans.com, fedhomeaffordableplan.com, and various other Web sites to market loan modification services, often displaying official government agency seals or logos and links to the websites of federal government agencies such as HUD, the U.S. Treasury Department, and the White House.
Likewise, multiple sites operated by the defendants promoting debt relief services featured federal or state government logos and seals. Consumers who provided basic information on any of the sites were all assured that they qualified for mortgage assistance or debt relief programs.
The settlement imposes a $1.1 million judgment against all four defendants: Dominant Leads LLC; MAD TJ Holdings LLC; James Rambadt, also known as James Kane; and Thomas Hayes. Rambadt is required to pay $15,000, with the rest of the judgment against him suspended because of his inability to pay.
Hayes is required to pay $7,000, with the rest suspended due to his inability to pay. If it is determined that the financial information the defendants gave to the FTC was untruthful, the full amount of the judgment will become due.
Making Home Affordable: In its May 2009 complaint, the FTC alleged that the defendants impersonated MakingHomeAffordable.gov, a federal government website that helps eligible homeowners refinance or modify their mortgages. The FTC previously settled with six other defendants and has now reached a settlement with the final defendant, Scott Lady.
According to the FTC, consumers looking for the federal Making Home Affordable program were diverted to commercial websites that pitched loan modification services or sold consumers’ personal information to marketers that did. Lady marketed bogus mortgage relief services through two Internet Web sites that he operated and through search engine advertising promoting his sites. Making claims such as “Instantly Stop Foreclosure,” and “Guaranteed Solutions to Lower Your Rate Today,” Lady sold to third parties the personal information of consumers who responded.
In addition to the prohibitions against offering mortgage modification services and restrictions on related activities, the settlement imposes a judgment against Lady for $710,415, which will be suspended because of his inability to pay. If it is determined that the financial information Lady gave to the FTC was untruthful, the full amount of the judgment will become due.
