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CFPB Awarded $59M in Mortgage Relief Fraud Case

A federal judge in Wisconsin has awarded the Consumer Financial Protection Bureau (CFPB) a $59 million judgment from two defunct mortgage-relief law firms and their attorney principals as restitution and civil penalties for misrepresenting their services to consumers. This is the final judgement in the CFPB’s 2014 case, which accused The Mortgage Law Group LLP, Consumer First Legal Group LLC and their founding partners of scamming struggling homeowners into paying illegal upfront fees for mortgage assistance legal help that wasn’t delivered as promised.

Law360 reports that U.S. District Judge William Conley ordered the payments on November 4, and puts the former firms and their principals on the hook for paying various pieces of a combined $21.7 million in restitution to consumers, most of which TMLG was already ordered to pay in 2017 as part of a stipulated agreement resolving its part of the case.

The judgment also orders civil penalties totaling nearly $37.3 million for CFLG and the individual defendants, Thomas Macey, Jeffrey Aleman, Jason Searns and Harold Stafford, the bulk of which will fall on Macey, Aleman and Searns.

The civil penalty amount is roughly $9 million less than what the CFPB proposed earlier this year, and Judge Conley disagreed with the date calculated used by the CFPB in working up its penalty recommendations as well as its tally of violations by each defendant. While the agency argued that each discrete regulatory violation found by the court should count toward that number, Judge Conley said such an approach “would result in excessive and duplicative penalties in this case.”

“Therefore, exercising the discretion granted by the civil penalty statute and relevant case law, this court will calculate the number of violations based on the general category of each defendants’ misconduct—such as making misrepresentations or failing to make certain disclosures—rather than on subcategories for each specific type of misconduct,” the judge wrote.

About Author: Seth Welborn

Seth Welborn is a Reporter for DS News and MReport. A graduate of Harding University, he has covered numerous topics across the real estate and default servicing industries. Additionally, he has written B2B marketing copy for Dallas-based companies such as AT&T. An East Texas Native, he also works part-time as a photographer.

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