It’s official! The last remaining defendants in an allegedly fraudulent mortgage modification scheme called “Hope Now” have settled with the Federal Trade Commission (FTC) that will permanently ban them from the mortgage assistance and relief business. They will also be forced to return any fraudulent-earned gains to consumers.
The settlement with Michael Kwasnik and his law firm is part of the FTC’s ongoing crackdown on scams taking advantage of consumers in financial distress. The settlement order bans Kwasnik and the firm from advertising, marketing, promoting, or selling mortgage assistance relief products or services, or assisting others to do so, and requires them to pay $137,656 to the FTC for consumer redress.
The FTC alleged that Kwasnik and his law firm were part of an operation called Hope Now Modifications that falsely claimed to be part of “Hope Now Alliance”, a non-profit, government-endorsed mortgage assistance network.
In March 2009 the FTC charged Hope Now Modifications and its two principals with falsely advertising that they were part of the Hope Now Alliance. The FTC also alleged that the defendants often diverted one month’s mortgage payment as a fee from distressed homeowners, failed to help them modify their mortgages, and then denied them refunds.
In September 2009, the FTC amended its complaint, adding Kwasnik and his law firm, The Law Firm of Kwasnik, Rodio, Kanowitz & Buckley P.C., as defendants, and adding allegations that all defendants violated the FTC’s Telemarketing Sales Rule by falsely advertising their services. The original defendants, Hope Now and its two principals, settled the FTC charges in July 2010.
They also agreed to be banned from selling mortgage relief services and to surrender all the funds in their bank accounts, which had been frozen by the court.
In addition to the ban on mortgage assistance relief services, the settlement announced today prohibits Kwasnik and his law firm from misrepresenting the benefits, terms, or conditions of financial products and from making misrepresentations about any good or service, including claims of an affiliation with any government entity or program. They also are prohibited from violating the Telemarketing Sales Rule (TSR), and must protect and properly dispose of customer personal information – Source.
Although, isn’t EVERYONE supposed to be prohibited from violating the TSR? Isn’t that the point of a rule?
Hope Now Schemers Officially Out Of The Mortgage Business by Amanda Miller
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