CFPB Halts Alleged California Loan Mod Scams

Posted by Orb Staff on December 12, 2012 No Comments
Categories : Mortgage Servicing

12901_cfpb CFPB Halts Alleged California Loan Mod Scams The Consumer Financial Protection Bureau (CFPB) has announced actions to halt two alleged California-based mortgage loan modification scams that took in more than $10 million by charging consumers for services that falsely promised to prevent foreclosures or renegotiate troubled mortgages.

The CFPB complaints allege that the defendants in both cases violated the Dodd-Frank Act and Regulation O, formerly known as the Mortgage Assistance Relief Services Rule. These laws prohibit unfair, deceptive, or abusive acts or practices and protect distressed homeowners from mortgage relief scams. At the request of the CFPB, U.S. District Court Judges in California have ordered a halt to both operations – the Gordon Law Firm and the National Legal Help Center – and have frozen their assets while the CFPB moves forward with the cases.

‘We are taking on schemes that prey on consumers who are struggling to pay their mortgages or facing foreclosure,’ says CFPB Director Richard Cordray. ‘We are especially concerned with those who misrepresent government programs or websites to divert distressed homeowners from needed assistance.’

The case involving the National Legal Help Center was initially referred to the CFPB by the Office of the Special Inspector General for the Troubled Asset Relief Program and the U.S. Department of the Treasury's Office of Financial Stability, which have coordinated closely with the CFPB throughout the investigation.

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