Judgments totaling more than $30 million have recently been obtained by state and federal agencies against loan modification companies that collect up-front fees — some as high as $5,000 — then do nothing to help the borrower avoid foreclosure.
Several settlements were announced by the Federal Trade Commission in July. Among them was an $11.5 million settlement with Steven Oscherowitz who, through his company Federal Loan Modification Law Center, advertised a “federal loan modification program,” charged up-front fees of up to $3,000 and failed to meet the promises made.
Another FTC settlement — this one with Dean Shafer, Marion Anthony “Tony” Perry, and Bernadette Perry — resolved allegations that the defendants falsely promised modifications for advance fees of $5,000 through the company Loss Mitigation Services. The defendants also allegedly gave the impression they were connected with loan servicers.
A $6.2 million judgment against the Loss Mitigation Services defendants was suspended due to their inability to pay.
Salvatore Puglia and Nicholas Puglia of Hope Now Modifications LLC settled with the FTC allegations that they falsely claimed they could obtain loan modifications in virtually all cases and would provide refunds if they failed. The two also allegedly implied that they were tied to the HOPE NOW Alliance.
An order for the Puglias to pay a $5.3 million judgment is being suspended once they surrender all funds in their bank accounts. But the FTC wasn’t the only governmental entity going after the Puglias.
New Jersey Attorney General Paula T. Dow recently announced a $5 million judgment filed in Superior Court in Camden County that was agreed to by Hope Now Financial Services Corp. and Hope Now Modifications LLC as well as the two Puglias. According to the state, the judgment settles allegations that the defendants collected up-front fees for loan modifications without taking any subsequent action in violation of the Consumer Fraud Act, Advertising Regulations and the Debt Adjustment and Credit Counseling Act. The defendants also allegedly implied they were tied to the HOPE NOW alliance.
Home Assure LLC has agreed in an FTC settlement to return $2.4 million to customers who paid up-front fees of between $1,500 and $2,500. The FTC claims Home Assure “did little or nothing to help consumers avoid foreclosure” and frequently refused to provide refunds despite written promises to the contrary. As part of the settlement, the company has agreed to stop providing loan modification services.
With a search warrant in hand, the sheriff’s office in Clay County, Fla., conducted a search of Global Equity Solutions in Middleburg, Fla., according to an announcement earlier this month from the sheriff and the Florida Office of Financial Regulation.
The offices of Orange Park, Fla.-based Hope Financial Services were also searched by the sheriff.
The two firms were accused of providing unlicensed loan modification services — collecting between $1,195 and $1,795 per transaction. Nearly 250 clients with pending cases had already paid the up-front fees. Cease-and-desist orders were issued against both Global and Hope barring them from doing any more business.
A default judgment was obtained in Dane Country Circuit Court by the Wisconsin Department of Justice against Federal Loan Modification Center, according to a Sept. 2 announcement. The Northridge, Calif.-based company is accused of violating Wisconsin laws and promoting itself as a federal program — even though it was not affiliated with the federal government..
Federal Loan Modification, which was ordered to pay $105,574, allegedly collected up-front fees of as much as $3,500 per transaction then failed to provide the services promised or refunds. Some borrowers were reportedly told to stop making their mortgage payments.
Through his company American Mortgage Counseling, Santiago Pineda is accused by Denver District Attorney Mitchell R. Morrisey of stealing thousands of dollars from delinquent borrowers as he promised to refinance and renegotiate their mortgages and stop foreclosure.
Pineda has been charged with multiple counts of theft and is in custody in the Denver Detention Center.
