The ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) put a stop to two companies it believes took part in mortgage modification scams that cheated thousands struggling homeowners.[IMAGE]
The CFPB alleges Gordon Law Firm and the National Legal Help Center amassed more than $10 million after charging consumers for services that falsely promised to stop foreclosures or provide modifications.
At the bureau's request, U.S. District Court judges in California ordered both companies to halt operations and froze their assets.[COLUMN_BREAK]
""We are taking on schemes that prey on consumers who are struggling to pay their mortgages or facing foreclosure,"" said CFPB director Richard Cordray in a release. ""We are especially concerned with those who misrepresent government programs or websites to divert distressed homeowners from needed assistance.""
The CFPB's complaints allege that the defendants in both cases violated the Dodd-Frank Act and Regulation O. According to a release from the CFPB, the laws prohibit unfair, deceptive, or abusive practices.
The CFPB alleges violations in both cases include illegally charging upfront fees ranging from $1,000 to $4,500, claiming affiliation with the government, misleading homeowners into believing modifications would be secured, and instructing consumers to stop paying and stop contacting lenders.
The CFPB also alleges the defendants stopped returning calls and emails from customers after taking thousands of dollars in illegal fees from distressed homeowners.
The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and Treasury's Office of Financial Stability referred the case involving the National Legal Help Center to the CFPB.