Defendants sought advance payments for services they never delivered
The Federal Trade Commission has charged a mortgage relief operation with deceiving distressed homeowners by falsely promising to make their mortgages more affordable and prevent foreclosure. A federal court temporarily halted the scheme and froze the defendants’ assets at the FTC’s request.
According to the FTC, the defendants claim a 99 percent success rate and guarantee results regardless of a consumer’s situation, and falsely say they work with certain lenders and government mortgage assistance programs. One of the defendants, Capital Home Advocacy Center, falsely claims to be accredited by the Better Business Bureau, which rated it F, the BBB’s lowest rating.
Soon after consumers apply for the purported services, the defendants falsely tell them they are “confirmed” for a specific and substantial mortgage payment reduction, and direct them to pay several thousand dollars in “closing costs.” Federal law prohibits mortgage assistance providers from seeking or accepting payment before consumers contract with their loan holders or servicers on terms obtained by the providers.
The defendants encourage consumers to stop paying their lenders and fail to tell them that, by doing so, they could lose their homes and damage their credit ratings. The defendants also indicate that a consumer cannot or should not communicate with their mortgage lender or servicer.
In addition to prohibiting deceptive marketing claims, federal law prohibits mortgage assistance providers from misrepresenting the likelihood of success or how long it will take, pretending to be affiliated with any government agency or program, and misrepresenting a consumer’s obligation to make scheduled loan payments. Mortgage assistance providers must disclose that they are not associated with the government, that their services are not approved by the government or any lender, and that consumers can stop doing business with them or reject an offer without having to pay. In certain cases, they must disclose that a lender may not agree to modify a loan, and that people who stop paying their mortgages could lose their home or damage their credit.
The defendants, charged with violating the FTC Act and the Mortgage Assistance Relief Services Rule [MARS Rule (Regulation O)], are: American Home Servicing Center LLC; Capital Home Advocacy Center LLC; National Advocacy Center LLC; Jaime Aburto, also known as James Aburto and Jamie Aburto, and doing business as A.H.S.C.; Marcus Fierro, Jr., d/b/a A.H.S.C. and American Home Servicing Center; Eve Christine Rodriguez, a/k/a Elizabeth Davis, Elizabeth Powers, Christine Rodriguez, Christina Rodriguez and Elizabeth Rodriguez, and d/b/a National Advocacy Group; and Sergio Lorenzo Rodriguez, a/k/a Sergio Lawrence and d/b/a National Advocacy Group.
The Commission vote approving the complaint was 2-0. The U.S. District Court for the Central District of California entered a temporary restraining order against the defendants on April 13, 2018, and a preliminary injunction as to American Home Servicing Center LLC, Capital Home Advocacy Center LLC, National Advocacy Center LLC, and Marcus Fierro, Jr. on April 26, 2018.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.