CFPB, Florida Receive $27.7 Million Judgment Against Firm for Foreclosure Relief Fraud

The Consumer Financial Protection Bureau (CFPB) and the State of Florida were granted a final judgment totaling $27.7 million against a Florida law firm and its affiliates for fraud perpetrated against distressed homeowners who were seeking relief or trying to avoid foreclosure, according to a release from the CFPB.

The Hoffman Law Group and its operators, Michael Harper and Benn Willcox along with attorney Marc Hoffman, and the firm's affiliates, Nationwide Management Solutions, Legal Intake Solutions, File Intake Solutions, and BM Marketing Group, all based in North Palm Beach, allegedly deceived consumers into joining frivolous lawsuits that were purported to pressure banks into modifying their mortgage loans to prevent foreclosure. The companies allegedly illegally collected millions of dollars in upfront legal fees from unsuspecting consumers.

The court found that the companies were found liable for $11,730,579, the total amount they collected in illegal upfront fees from consumers, and also imposed an additional civil penalty of $10 million to be paid to the state of Florida, according to the CFPB.

"These companies preyed on vulnerable consumers who were trying to save their homes from foreclosure," CFPB Director Richard Cordray said. "The false promises made by these companies lured struggling homeowners into scams that led to greater financial hardship. We are working to protect consumers from illegal predatory practices by holding bad actors accountable for their actions."

According to the CFPB, the Hoffman Law group was set up to give the appearance that it would give specialized legal help to distressed homeowners who were either seeking mortgage loan modifications or trying to avoid foreclosure. Harper and Willcox ran the affiliated companies, which were set up to market the scam. The CFPB and the Attorney General of Florida obtained a temporary restraining order and asset freeze against the companies and against Harper, Hoffman, and Willcox, and a receiver took control of all the assets flowing from the alleged scheme per court order.

The lawsuit charged the defendants with violating Regulation O, which was formerly known as the Mortgage Assistance Relief Services (MARS) rule, and Florida state law. Regulation O requires consumers to be given certain disclosures and prohibits the charging of advance fees for mortgage loan modification services.

"Scamming homeowners worried about losing their homes is not only illegal, it is despicable, and thanks to the great work of my consumer protection division and the Consumer Financial Protection Bureau, these defendants will pay for preying on Florida homeowners facing foreclosure,” Florida Attorney General Pam Bondi said. "Foreclosure rescue scammers cannot evade the law by hiding behind a law firm. It is discouraging that there are attorneys out there that will allow their licenses to be used by shady companies to target people facing foreclosure."

Click here to see the complete text of the court's judgment. To see the CFPB's complaint, click here. To see the individual orders, click on their names: Marc Hoffman, Michael Harper, and Benn Willcox.