Foreclosure rescue scam shut down by FTC
Calling it a "massive fraud," the Federal Trade Commission won a court order to shut down an operation that allegedly duped homeowners facing foreclosure into paying money while getting nothing in return, the agency said on Thursday.
Essentially, the supposed foreclosure rescue group, known as both HOPE Services and HAMP Services, "stole their mortgage payments," the FTC said.
"These defendants stole mortgage payments from struggling homeowners, and they pretended to be a nonprofit working with the government," Jessica Rich, director of the FTC's Bureau of Consumer Protection said in a statement. She termed the outfit "shameful mortgage frauds."
According to the FTC lawsuit, homeowners lost close to $2 million. In some instances, victims paid the equivalent of several mortgage payments. It was more than some of these families, struggling to keep afloat, could handle.
The scheme would get started with a letter that had what is described as an official government seal. The letter explained that the recipient might qualify for help from the "New 2014 Home Affordable Modification Program" (HAMP 2).
In addition, the operation boasted of a high success rate of getting loan terms modified. The outfits would then collect financial information from the victims and tell them their application would be submitted to the U.S. Department of Housing & Urban Development, the Neighborhood Assistance Corporation of America and the "Making Home Affordable" (MHA) program, the FTC said.
They used an actual MHA application -- but did not include a page warning of foreclosure rescue scams with the admonition to never making mortgage payments to anyone other than your lender unless the lender had approved the arrangement.
Afterward, victims were told they had been approved for a lower interest rate and lower payments. Then, following three "trial payments," sometimes being charged another fee, they would be told they were safe from foreclosure. They were told not to talk to either their lender or a lawyer.
But there was no modification, and lenders weren't sent money. Another call from a phony "Advocacy Department" was used to get victims to continue making the "trial payments."
In reality, these people were falling further and further behind on their mortgage payments. Some lost their homes, the FTC said.
Defendants include Chad Caldaronello (aka Chad Carlson and Chad Johnson); C.C. Enterprises, doing business as HOPE Services, Retention Divisions, and Trust Payment Center; Justin Moreira (aka Justin Mason, Justin King and Justin Smith); Derek Nelson (aka Dereck Wilson); D.N. Marketing, doing business as HAMP Services and Trial Payment Processing; and Brian Pacios (aka Brian Berry and Brian Kelly).
They're accused of violating several federal laws including the FTC Act, the FTC's Mortgage Assistance Relief Services Rule and its Telemarketing Sales Rule.
