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04/03/12

FTC Files Action Against Loan Mod/Foreclosure Counseling Scammers

(Source: FTC) - The FTC has filed another action against defendants who allegedly attempted to squeeze the last drop from homeowners already under water.  This case, however, involves a disturbing new variation on foreclosure "rescue" operations.

According to the FTC, the defendants used two related schemes to prey on people infinancial distress.  In the first one, defendants Sameer “Sammy” Lakhany, The Credit Shop, Fidelity Legal, and Titanium Realty deceptively claimed to be nonprofit groups that offer free loan modification and foreclosure relief services.

Their webpage sometimes included a picture of the President with the headline “Speak With a Counselor and Receive a FREE Loan Modification Under the Obama Loan Modification Programs.”  The logos of major mortgage lenders were also featured.

So what was really going on?  The complaint alleges that after gaining people’s confidence, the defendants persuaded them to spend between $795 and $1595 on a “forensic loan audit” that would make lenders agree to a loan modification.  What did the defendants actually achieve for most of their clients?  According to the FTC, pretty much bupkis. (OK, we’re paraphrasing, but you get the picture.)

Which brings us to the second part of the alleged scheme.  The FTC’s complaint charges that Mr. Lakhany and defendants Precision Law Center, Inc., and Precision Law Center LLC masqueraded as a specialty law firm and sent out direct mail resembling a class action notice. The FTC says they falsely claimed they could get people relief by suing their lenders along with other homeowners in so-called “mass joinder” lawsuits.  To convince people to hire the defendants, the FTC says telemarketers followed up by mailing material to homeowners promising the mass joinder suits would “halt and reverse foreclosure proceedings,” restore their credit, and possibly get them thousands of dollars in compensatory and punitive damages.

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