Skip to main content

FTC shuts down foreclosure "rescue" company

NationalMortgageProfessional.com
Apr 30, 2010

The Federal Trade Commission (FTC) has put a permanent stop to another mortgage foreclosure “rescue” operation that allegedly promoted bogus loan modification and foreclosure relief services. The case is one of 17 lawsuits the FTC has brought in the past 11 months in a crackdown on mortgage relief frauds that target financially strapped homeowners, and more cases are being investigated. In February 2009, the FTC charged National Foreclosure Relief Inc. and three of its principals with falsely claiming they would stop foreclosure or fully refund consumers’ money. At that time, the court temporarily halted the defendants’ deceptive practices pending trial, froze their assets, and appointed a receiver to take control of the business and its assets. Many people paid the company up-front fees as high as $1,000, but still ultimately lost their homes to foreclosure. Others avoided foreclosure only through their own efforts. After paying the fee, consumers who contacted the company were often either ignored or falsely told that negotiations with their lenders were under way. The FTC announced that it has reached settlements with National Foreclosure Relief and a former director, Chele Stone, also known as Chele Medina, which ban them from the mortgage modification business. The settlement orders also permanently prohibit them from making misrepresentations to consumers about financial goods and services, such as loan terms, the ability to improve someone’s credit history, and how much a consumer would save by enrolling in a debt relief service, or making misrepresentations about any good or service, such as refund terms and government affiliation. National Foreclosure Relief and Stone also are prohibited from seeking payment from or enforcing any contracts with customers who enrolled in their program before the FTC’s lawsuit, and from selling or otherwise disclosing customers’ personal information. The settlements impose a $12 million judgment, approximately $500,000 of which will be paid from company funds frozen by the court. The full judgment against Stone will become due immediately if she is found to have misrepresented her financial condition. Litigation will continue against the remaining two defendants in the case. The FTC had assistance from the California and Minnesota Attorney General offices, and the Orange County, Calif., District Attorney’s office. The Commission vote to file each of the stipulated final orders was 4-0. The documents were filed in the U.S. District Court for the Central District of California. For more information, visit www.ftc.gov.
Published
Apr 30, 2010
Fannie Mae Plans To Restart Credit Risk Transfers In 2021

Paused Since March 2020, New CRT Transactions To Begin In October

Regulation and Compliance
Sep 21, 2021
Biden Nominates McCargo To Lead Ginnie Mae

Currently Serves As Senior Advisor For Housing Finance At HUD

Regulation and Compliance
Sep 14, 2021
OCC Plans To Rescind 2020 CRA Rule

The OCC formally issued a proposal to rescind a controversial rule within the Community Reinvestment Act (CRA) that was published in June 2020.

Regulation and Compliance
Sep 10, 2021
CSBS Changes Servicer Liquidity Policy

CSBS And MBA Encourage States To Adopt Consistently

Regulation and Compliance
Sep 08, 2021
Flexibilities Move Forward

Pandemic Priorities Continue To Drive Industry Modernization

Regulation and Compliance
Sep 08, 2021
FHFA And The Enterprises Coordinate Action On Equitable Housing

Today the FHFA is announcing that Fannie Mae and Freddie Mac (the Enterprises) will submit Equitable Housing Finance Plans to the FHFA by the end of 2021.

Regulation and Compliance
Sep 08, 2021