Mortgage Modification and Foreclosure Rescue Companies Hammered by FTC

The Federal Trade Commission has announced some sweeping actions to protect homeowners that have been harmed by companies promising mortgage assistance but who allegedly only took money and ultimately didn’t deliver the help and outcomes promised.

Prime Legal Plans/Reaching U Network. The FTC alleged that from at least mid-2010, the defendants behind this scheme marketed mortgage relief services in English and Spanish, including under the names “Reaching U Network,” and “American Legal Plans.” They allegedly told consumers who were in debt that attorneys would review their mortgage loan documents to see if their lenders complied with state and federal mortgage laws, and would use the resulting “forensic audit” information to help save their homes and negotiate more favorable mortgage terms. The defendants told consumers that “80 percent of mortgages contain some fraud,” and “Our network attorneys have helped hundreds of Americans stay in their homes,” according to the FTC complaint.

But instead of helping consumers, the defendants charged them up to $750 a month, while little or nothing was done to save their homes from foreclosure, and running an operation that a court found was “permeated with illegal practices” , according to the FTC.

The FTC alleged that on company websites, the defendants would falsely claim to be a “private charity working for struggling consumers that can’t afford legal representation.” When responding to consumers who called the toll-free number on the websites, and when cold-calling consumers, including those listed on the Do Not Call registry, the defendants routinely failed to provide the disclosures required by the MARS Rule, collected up-front fees, and misrepresented the results that consumers could expect, according to the complaint.

The FTC charged that the defendants violated the Telemarketing Sales Rule, the FTC Act, and the MARS Rule by: calling consumers whose numbers were listed on the Do Not Call Registry; not paying the required annual fee to access the Registry; misrepresenting that they would get mortgage modifications to make consumers’ payments significantly more affordable and help prevent foreclosure, and that they would use so-called forensic audits to do this; misrepresenting the amount of time it would take to get results; failing to provide required disclosures about mortgage modification relief; and collecting advance fees.

A federal judge granted the FTC’s request for a temporary restraining order and ordered a freeze of the defendants’ assets and the appointment of a receiver. The preliminary injunction hearing is scheduled for October 11, 2012. – Source

The defendants named in this action were Prime Legal Plans, Consumer Legal Plans, CLP Associates, Freedom legal Plans, Reaching U Network, 123 Save a Home, American Hardship, Back Office Support Systems, Consumer Acquisition Network, Consumer Legal network, Legal Servicing & Billing Partners, Forensic Auditor Services, Telefunding Services, Mortgagesavers.org, First Capital land Trust, Florida Land Trust Consultants, Lazaro Dinh, Mario Lazaro Sopena, Mario Sopena, Lazro Sopena, Kim Landolfi, Derek Radzikowski, Andrew Primavera, Christopher Edwards, and Jason Desmond.

The FTC alleges Defendants the following facts.

At times material to this complaint Defendants Prime Legal Plans LLC;Consumer Legal Plans LLC (Nevada); Consumer Legal Plans, LLC (Wyoming); Freedom Legal Plans, LLC; Frontier Legal Plans, LLC; RUN; 123 Save A Home, Inc.; American Hardship, LLC; Back Office Support Services LLC; Consumer Acquisition Network, LLC; and Legal Servicing and Billing Partners, LLC, have operated as a common enterprise while engaging in the deceptive acts and practices set forth below. These Defendants have conducted those acts and practices through an interrelated network of companies that have common ownership, business functions, and employees; that have commingled funds; and/or that have shared one another’s marketing materials. In addition, these Defendants have operated from two primary office locations: 6451 N. Federal Highway, Suite 1200, Fort Lauderdale, Florida, and 2400 East Commercial Blvd., Fort Lauderdale, FL. Because these Defendants have operated as a common enterprise, each of them is jointly and severally liable for the acts and practices alleged below. Defendants Dinh, Landolfi, Radzikowski, Primavera, Edwards, and Desmond, have formulated, directed, controlled, had the authority to control, or participated in the acts and practices of the Defendants that constitute the common enterprise.

From at least mid-2010 to present, Defendants, through operation of the common enterprise, have engaged in a course of conduct to advertise, market, sell, provide, offer to provide, or arrange for others to provide MARS, including loan document and transaction reviews, mortgage loan modification services, and foreclosure defense services.

Defendants market their services in a variety of ways, including through websites and, directly and through their agents and telemarketers, by contacting consumers nationwide through unsolicited telemarketing calls. Many of these consumers registered their phone numbers with the National Do Not Call Registry prior to being called by Defendants. Defendants also engage in inbound telemarketing when consumers call in response to marketing efforts or advertising.

Defendants prey on financially distressed homeowners by luring them into membership programs with promises that they will receive full-service legal representation from expert foreclosure defense attorneys who will fight their lenders to save their homes from foreclosure or make their mortgage payments more affordable. In addition to legal representation, Defendants purport to provide consumers enrolled in certain of their programs with forensic loan audits and other reports to identify errors in their mortgage loan documents and to ferret out predatory lending practices, and to gather information that attorneys will use to defend against foreclosure and win concessions from lenders.

Defendants charge a monthly fee of either $595 or $750, depending on how much the consumer is willing to pay. Memberships last for an open-ended period of time. In numerous instances, Defendants have failed to obtain any relief for their customers.

The name of the membership program has changed numerous times, and has been offered through numerous entities under the following names: Freedom Legal Plans, American Legal Plans, Consumer Legal Plans, Frontier Legal Plans, Prime Legal Plans, and currently, Prime Access Management [collectively, “Legal Plans”].

Defendants marketed Legal Plans through “Reaching U Network” until around November 2011. They represented to consumers that Defendant RUN was a non-profit organization and exempt from taxes under Section 501(c)(3) of the Internal Revenue Code, even though the Internal Revenue Service revoked RUN’s tax-exempt status on May 15, 2010.

Defendants operated numerous websites featuring RUN, including but not limited to: www.wearereachingu.com; www.reachingutoo.com; www.reachingunetwork.com; www.reachinguamerica.com; www.reachingu.net; www.reachingu.info; www.reachingu.com; www.reachingu2help.org; www.reachingutoday.com; www.mylibertyfinancial.com; www.homehelpline.org; www.golegall23.org; www.americanflp.com; www.123savemyhome.com; www.123keepmyhome.com; and www.helpingnownetwork.com [collectively, “RUN Websites”]. While some of these websites varied from each other in certain respects, their content was largely identical. They all listed toll-free telephone numbers for consumers to call for a “free consultation.”

See also  Mortgage Assistance Scam Targets U.S. Consumers But Operates From Dominican Republic

“Non-profit charitable organization” was emblazoned over a red background across the center of the RUN Websites landing pages. The following text appeared underneath: Reaching U is helping thousands of Americans stay in their homes through the “Save Our Home Plan.” Fill out our case analysis form to see if you qualify for one of our foreclosure prevention programs, short sale or “Hardest Hit Program” available now in 27 States. We also have credit advocates available in all 50 states.

The following text began near the middle of the RUN Websites landing pages:

Our charity is here to help you with…
Fair Housing Pre-Purchase Education Workshops.
Financial Management/Budget Counseling.
Home Improvement and Rehabilitation Counseling.
Mortgage Delinquency and Default Resolution Counseling.
Non-Delinquency Post Purchase Workshops.
Predatory Lending Education Workshops.
Credit Counseling. – You can qualify for legal representation without an up front retainer.

A red stop sign containing the text “STOP Foreclosure Fraud” appeared at the top of the landing pages of the RUN Websites. Clicking on the stop sign took consumers to an online program enrollment form.

At the bottom of the RUN Websites landing pages, the words, “Report a LOAN MOD SCAM,” appeared in red as a hyperlink. Clicking on the hyperlink took consumers to the “Contact Us” page on the website, which contained an online form through which consumers could submit information including contact information and the best time to be reached.

The following disclaimer appeared at the bottom of the landing page of the RUN Websites: “Reaching U Network provides educational information only and does not provide legal advice. Every case is unique and outcomes will vary depending upon the facts and legal issues of your case. Please do not make any decisions about any legal matter without consulting an attorney first.” The disclaimer appeared in a font substantially smaller than the font of the text of the rest of the landing page, and on most of the RUN Websites, was visible only if the consumer scrolled down to the bottom of the page.

The “About Us” page contained the following description of RUN:

  • Reaching U Network is a non-for profit 501c3 organization established in 2001 and became active in the community at the end of 2009.
  • We survey consumer [sic] that need legal representation and educate them on their rights as a consumer.
  • We are funded by private corporations and donations and we are building up cases for 2011 in order to qualify for government funding.
  • Our mission statement is to help those who cannot afford legal representation by using donations to help pay for representation. We also have helped homeowners that are at risk of losing their home, by paying their past due balances in order to avoid foreclosure.
  • Our call centers use Tele-flinders to raise money thru donations and awareness thru education. All of our call centers are licensed to tele-funds [sic] thru a charitable organization license. As of 2011 we are in 13 states.
  • We are not a government agency. We are also not government funded. We are a private charity working for struggling consumers that can’t afford legal representation.
  • We participate in several community food drives and special events geared to raise funds or money for Struggling Americans.
  • We are determined to expose bank fraud and predatory lending practices.
  • Reaching U network does not profit from introducing homeowners to legal plan providers.

The RUN Websites contained “Testimonials” featuring stories from consumers who purportedly were able to avoid foreclosure or otherwise stay in their homes as a result of the efforts of RUN or Legal Plans and its network attorneys.

The RUN Websites also included Spanish webpages. While the information on the Spanish webpages was substantially similar to the information provided in the English versions, the Spanish webpages (translated from Spanish into English) urged consumers to call a toll-free telephone number for “a FREE Analysis of your case” and stated that “80% of residential loans contain some type of fraud or irregularity.” The Spanish portions of the RUN Websites did not contain any disclaimers about the efficacy of the Defendants’ services.

The Evolution of the Legal Plans Marketing Scheme

In late 2011, Defendants stopped using RUN as the primary face of their operations. Defendants, however, continue to operate several websites to market their services, including but not limited to: www.123saveahome.org; www.regulationz.org; www.saveourhomeplan.com; www.americanlegalplans.com; www.frontierlegalplans.com; www.unitedhomedefenders.com; www.defendmyhome.net; defendmyhouse.com; homeownerhardships.com; www.mavpprogram.com; www.coprograms.org; www.americaunitedgroup.com; www. 123psg.com; www.consumeracquisitionnetwork.com; www.afsoa.com; www.neighborhoodhelpline.com; www.homeownerrescuemission.com; www.americanhardship.com; and www.primeaccessmanagement.com. Those websites list toll-free telephone numbers for consumers to call and/or contain an online form through which consumers can submit contact information.

Other websites that Defendants operate contain the following statements about the prowess of their network attorneys:

  • Her mortgage payment was $2,400 per month, she now pays her attorney $595 per month with no upfront retainer or set up fee and all audits were included. She has been living in her house paying just $595 for 4.5 years now and the bank is so scared of the research the attorney has done, as well as the discovery performed on her loan, that they have backed off her case. Her attorney filed for a dismissal of the case in court and it was granted, she now has no lawsuit, no one chasing her for a payment and so much evidence of fraud against her lender that her attorney is filing a suit to get her mortgage deleted and her house for free. She has saved over $86,000 in payments in 4 years; still lives in the same house her 3 sons grew up in and she is protected by the attorney who works on her case several hours per month for a flat rate of $595 per month, (emphasis in the original)
  • Every attorney in the network concentrates on foreclosure and goes through an extensive review before being qualified to participate. In addition to the review your attorney is required to make a commitment to provide you with a level of service that is usually enjoyed only by large corporate clients.
  • Imagine being able to fight your foreclosure, having a full legal defense team working for you, litigating your case in court and working to reinstate your mortgage. This is far better than doing nothing and allowing the banks to easily come after you and take your home that you worked so hard to acquire.
  • “Having legal representation during a foreclosure usually results in a bank agreeing to restructure the terms of your loan to produce a payment or reinstatement package you can afford” (emphasis in the original)
  • The banks are getting very aggressive and they are using shrewd law firms to fast forward your foreclosure case. It is your right as an American to fight back with the best defense team available for your case. Without a American Legal Plans attorney to help you litigate your case, your rights may not be fully utilized in a Court of Law. Our network attorneys have helped hundreds of Americans stay in their homes. You too may have a favorable outcome if you choose the right defense plan.

Defendants also market through advertisements posted on internet search engines and on television advertisements. One of their internet advertisements has appeared as follows:

Prime Access Management – You May Get as Low as 2% Fixed Rate www.afsoa.com/ Low Fixed Fee Solutions. Call Now.

The Sales Pitch

Defendants initiate contact with consumers in many ways, including but not limited to unsolicited outbound telemarketing calls, inbound telephone calls from consumers originating from Defendants’ websites or other marketing materials, and outbound calls to consumers in response to information consumers submit on Defendants’ websites.

In numerous instances, Defendants and their representatives have told consumers that they are calling on behalf of a 501(c)(3) tax-exempt and/or non-profit organization about a community outreach program designed to help struggling homeowners.

In numerous instances during unsolicited outbound sales calls to consumers, Defendants’ representatives have told consumers who registered their telephone numbers with the National Do Not Call Registry that Do Not Call restrictions did not apply to their calls because of the company’s non-profit status. Consumers are also told that the legal representation they will receive includes unlimited telephone consultations and representation in negotiation, arbitration, and all elements of litigation, including depositions, court appearances, and motions.

Post-Sales Pitch Communications

In numerous instances, after the initial sales pitch, Defendants have provided consumers with additional materials via email to bolster their claims about the outcomes that consumers who enroll in Legal Plans can expect to achieve. Those materials contain various claims about Defendants’ services, including:

  • Lenders are under Federal Investigation for predatory loans, predatory lending practices and fraud. You have legal rights as a home owner, and if there are violations in your mortgage you are entitled to damages or at the least a mortgage you can afford. A Forensic Loan Audit* and an attorney specializing in Mortgage/Foreclosure Defense can help you achieve this.
  • “The Forensic Loan Audit is a 200 point inspection of your loan documents to see if you have been a victim of predatory lending or fraudulent practices of any kind. Based on the findings and the severity of such, the attorney would be able to litigate against your lender for damages. Some homeowners have won their deed in a court of law because of the severity of the findings.


During the initial enrollment process, Defendants request payment information and authorization from consumers. They begin collecting membership fees of either $595 or $750 per month, usually through automatic debits from consumers’ bank accounts.

In numerous instances, Defendants’ representatives have told consumers expressly or by implication that if they enrolled with Legal Plans they would likely obtain loan modifications or other concessions from lenders and that the process would be complete within as little as three to four months.

In numerous instances, Defendants’ representatives have told consumers that attorneys working with Legal Plans will be able to prevent foreclosure, or at a minimum, delay it.

In numerous instances, Defendants’ representatives have told consumers that they will conduct various audits and reviews of the consumers’ loan documents and transactions and that the majority of audits and reviews reveal fraud, errors, or predatory acts committed by the lender.

In numerous instances, Defendants’ representatives have claimed that attorneys in the Legal Plans network will use the findings from the audits and reviews to defend consumers against foreclosure and extract concessions from lenders that will lower consumers’ monthly mortgage payments through reductions in loan principal and/or interest rates. They claim that lenders will grant those concessions to avoid going to court when confronted with proof that they violated the law.

In numerous instances, Defendants’ representatives have told consumers that errors or fraud in consumers’ mortgage loans and transactions can void a mortgage entirely, and that even a minor error could nullify a mortgage, giving the consumer free and clear ownership of the home.

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Defendants’ representatives tell consumers that by enrolling or continuing enrollment in Legal Plans, they will obtain full-service legal representation to fight their the consumer’s enrollment. Consumers’ enrollment in Legal Plans and payment of monthly membership fees is open-ended and could continue indefinitely.

Typically, consumers who enroll in Legal Plans are assigned to a non-attorney customer service representative from Legal Plans and a paralegal from the law firm Litvin, Torrens, & Associates PLLC or Litvin Law Firm, P.C. The Legal Plans representatives and paralegals act as consumers’ primary points of contact during enrollment.

In numerous instances, consumers who enroll do not receive legal representation. Although they may be assigned an attorney in a nominal sense, many consumers never meet or speak to a network attorney licensed in the state where they reside or where the property at issue is located, or have had only introductory conversations.

In numerous instances, consumers who have enrolled in Defendants’ programs have been left to negotiate on their own with lenders. Consumers enrolled in Legal Plans have complained that they do not receive the legal representation they were promised.

In numerous instances, consumers enrolled in Defendants’ programs have suffered significant economic injury, including: paying hundreds or thousands of dollars to Defendants and receiving little or no service in return; going into foreclosure; and even losing their homes.

In numerous instances, after consumers have enrolled in Defendants’ programs and paid the requested advance fees, Defendants have failed to obtain a loan modification, principal reduction, or other relief to stop foreclosure or make consumers’ mortgage payments affordable. – Source

Damon Day - Pro Debt Coach

Follow Me
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
Steve Rhode
Follow Me

Comments are closed.