Under a settlement with the Federal Trade Commission (FTC), two companies and three individuals are banned from the mortgage relief services business and must relinquish $2.2 million in assets for consumer refunds. The action is part of the FTC’s ongoing effort to stop scams that target financially strapped homeowners seeking mortgage relief.
In November 2009, the Federal Trade Commission (FTC) alleged that Kirkland Young LLC and its manager, David Botton, misrepresented themselves as consumer mortgage lenders, servicers, or their affiliates, and falsely promised they would modify consumers’ loans and make their mortgage payments more affordable. The court halted the operations and froze the defendants’ assets pending resolution of the case. The following month, the FTC added Botton’s sister, April Botton Krawiecki; their father, Samy Botton; and Attorney Aid LLC as defendants.
In addition to banning the defendants from selling mortgage relief services, the settlement announced today permanently prohibits them from misleading consumers about financial-related goods and services, such as misrepresenting loan or refund terms, affiliation with any person or government entity, and the ability to improve someone’s credit history. The settlement bars the defendants from selling or otherwise disclosing customers’ personal information, enforcing contracts with mortgage relief clients, and violating the Telemarketing Sales Rule. The settlement imposes a $6.1 million judgment that will be suspended when Samy Botton has paid $300,000; David Botton has surrendered certain assets, including a condo, a car, and a boat; April Botton Krawiecki has surrendered a condo; and Kirkland Young LLC and Attorney Aid LLC have surrendered all of their assets, worth $2.2 million.
The FTC recently issued the Mortgage Assistance Relief Services Rule, which bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable. Because the defendants’ claims predated the Rule, the FTC did not allege any violations of the Rule in this case.
The FTC vote approving the proposed consent order was 5-0. It is subject to court approval. The FTC filed the proposed consent order in the U.S. District Court for the Southern District of Florida. The FTC acknowledges the assistance of the Offices of Attorney General in Florida and Ohio in this matter.