On February 2, 2011, in the U.S. Dist. Ct. S.D. of Florida, Miami, an FTC complaint was filed against U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, and principals John Incandela, Jr., Jamen Lachs, and David Mahler for misleading consumers that they were affiliated with or approved by consumers’ lenders. Consumers were advised not to contact their lenders and to stop making mortgage payments because doing so would demonstrate hardship and the need for a mortgage modification.
The defendants listed had targeted financially distressed consumers by using direct mail, the internet and telemarketing. They would falsely promise loan modifications to make consumers’ mortgages more affordable, even boldly promising to fully refund their money if they failed.
For their “help,” consumers were being charged up to $2,600 for these services, with half of the fee being required upfront. The defendants also claimed a 100% success rate—which should have been the first red flag for consumers. Very few companies or organizations have a 100% success rate for anything, much less something as complicated and as a loan modification.
According to the Mortgage Assistance Relief Services rule recently issued by the FTC, providers of mortgage foreclosure rescue and loan modification services are banned from collecting fees until homeowners receive a written offer from their lender or servicer that they decide is acceptable. Because the defendants’ ads predated the rule, the FTC could not allege any violations of that rule in this particular complaint filing.
The defendants listed had targeted financially distressed consumers by using direct mail, the internet and telemarketing. They would falsely promise loan modifications to make consumers’ mortgages more affordable, even boldly promising to fully refund their money if they failed.
For their “help,” consumers were being charged up to $2,600 for these services, with half of the fee being required upfront. The defendants also claimed a 100% success rate—which should have been the first red flag for consumers. Very few companies or organizations have a 100% success rate for anything, much less something as complicated and as a loan modification.
According to the Mortgage Assistance Relief Services rule recently issued by the FTC, providers of mortgage foreclosure rescue and loan modification services are banned from collecting fees until homeowners receive a written offer from their lender or servicer that they decide is acceptable. Because the defendants’ ads predated the rule, the FTC could not allege any violations of that rule in this particular complaint filing.
