Court Orders Scammers to Pay $18.5M in Mortgage Fraud Scheme
December 31, 2019
A U.S. District Court has ordered a handful of mortgage relief companies accused of running a mortgage fraud scheme to pay up millions in relief to those they scammed.
The U.S. District Court for the District of Nevada ruled in favor of the Federal Trade Commission in a case involving a scheme where scammers promised homeowners they would lessen their mortgage payments. The companies charged consumers advance fees and instructed them to stop paying their mortgages to or communicating with their lenders, the FTC had argued in the case.
Consumers were charged $3,900 in advance fees and $650 in monthly installments to access the mortgage aid services. The companies, in return, vowed to cut the homeowners’ mortgage rate in half and reduce their monthly mortgage payments by several hundred dollars.
The FTC accused Jonathan Hanley and Sandra Hanley of leading the scam, and several companies were also named as being part of it by the FTC, including Preferred Law; Consumer Defense; Consumer Link; American Home Loan Counselors; American Home Loans; Consumer Defense Group, formerly known as Modification Review Board; Brown Legal; AM Property Management; FMG Partners; and Zinly.
The U.S. District Court has ruled that the companies violated the FTC Act and the Mortgage Assistance Relief Services Rule. They are permanently banned from taking part in the debt relief business. The court also ordered the companies to pay $18.5 million.
“Scammers Ordered to Pay $18.5 Million for Preying on Struggling Homeowners,” HousingWire (Dec. 30, 2019)
Updated: January 22, 2020