The operators of a mortgage foreclosure rescue company are banned from selling mortgage relief services under a settlement with the Federal Trade Commission and the states of California and Missouri, which sued them in 2009 as part of a federal-state crackdown on mortgage loan modification and foreclosure relief scams.
U.S. Foreclosure Relief Corp., along with George Escalante, Cesar Lopez and Adrian Pomery falsely claimed they helped 85% of clients get their loans modified and that they would get loan modifications to make consumers' homes much more affordable, according to the FTC complaint. They also allegedly violated state laws against charging advance fees for foreclosure consulting services. The court immediately barred the practices and froze the defendants’ assets. The defendants boasted a “proven track record” and the “highest standards of business ethics."
The FTC during the investigation added Escalante's firm H.E. Servicing Inc. and Brandon L. Moreno and his law firm, Cresidis Legal, as defendants. They were charged with two additional law violations including falsely claiming a lawyer would negotiate the terms of consumers’ home loans and falsely promising refunds if they failed.
The FTC order imposes an $8.6 million judgment against Escalante and his two firms, U.S. Foreclosure Relief and H.E. Servicing. The judgment will be suspended except for $980,000 in cash, jewelry and vehicles that Escalante and his companies surrendered to lenders or the court-appointed receiver. The vehicles include a 2007 Cadillac Escalade, a 2008 BMW sedan, a 2007 Mercedes-Benz SUV and a 2009 Toyota Tundra truck.
The order imposes $3.3 million and $3.4 million judgments against Lopez and Pomery, respectively. The judgments will be suspended because of their inability to pay. The full amount will become due immediately if they are found to have misrepresented their financial condition.
The settlement resolves the case against the original defendants and H.E. Servicing. The case continues against Brandon L. Moreno and Cresidis Legal.
Along with banning the settling defendants from selling mortgage loan modification and foreclosure relief services, the order prohibits them from making misrepresentations about financial goods and services - such as loan terms, ability to improve someone’s credit history and how much a consumer will save by enrolling in a debt relief service.
The order also bars the defendants from making misrepresentations about any good or service - such as refund terms, government affiliation and total cost - and from violating the FTC’s Telemarketing Sales Rule. Finally, the order bars the defendants from enforcing any contracts with their customers and selling or otherwise disclosing customers' personal information.
