Recently, a federal judge granted final judgment against a local Florida law firm and its associates for operating a massive foreclosure relief scam. The Consumer Financial Protection Bureau (CFPB) and the state of Florida claimed that the firm and its affiliates had fraudulently charged fees from approximately 2,000 clients who were seeking foreclosure relief. The firm was sued by CFPB and the state of Florida for violating both Florida law and a federal rule concerning mortgage assistance.
$11.7 million of unlawful advance fees were collected by the law group and its affiliates, all of which they will be liable for. The firm must also pay a $10 million civil money penalty that has been issued for the CFPB, as well as a $6 million penalty to Florida, totaling $27.7 million for their involvement in the scam. However, the majority of these penalties will be uncollectable. Last year both the CFPB and Florida froze the companies’ assets and the firm’s remaining assets, which are just over half a million dollars. CFPB Director Richard Cordray stated, “We are working to protect consumers from illegal predatory practices by holding bad actors accountable for their actions.”
The firm managed to lure clients in with deceptive marketing tools and false expectations for loan modifications and protection from foreclosure. Unsuspecting homeowners seeking to adjust their loans and keep their homes were charged an upfront fee of $6,000. A monthly payment of $495 was also collected from the homeowners. According to court documents, the firm violated federal rules by discouraging clients from communicating directly with their lenders or servicers, claiming they would handle all communications for the homeowners.
The CFPB explained, “Companies cannot legally accept payment for helping to obtain a mortgage modification for a consumer before the consumer has a modification agreement in place with their lender.” At this time, CFPB reports that the companies have been permanently disbanded and are no longer able to do business of any sort. The law firm’s associate has also relinquished his license to practice law in the state of Florida.
Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
Sources: http://www.americanbanker.com/news/law-regulation/cfpb-florida-win-case-over-alleged-foreclosure-relief-scam-1074596-1.html
http://www.housingwire.com/articles/34036-cfpb-secures-277-million-judgment-against-foreclosure-relief-scammers
