WASHINGTON — Federal regulators have banned eight individuals and companies from selling mortgage-relief services, settling charges that they used false advertising to deceive homeowners facing foreclosure.
The Federal Trade Commission said Monday that it has ordered the firms and individuals to return $29.2 million in fees that they allegedly collected from clients. However, some of the individuals charged are unable to pay and the agency said it has agreed to suspend $11.5 million in judgments.
The settlements were the latest actions against marketers who authorities said exploited distressed homeowners to turn a profit.
Since the housing crisis began, the FTC has brought 29 cases against those who have falsely promised mortgage relief in exchange for hefty fees up front. The agency said it would continue to pursue relief scams.
Some of the companies used names that deceived borrowers into believing the firms were participating in the Obama administration's $75 billion mortgage modification effort, known as "Making Home Affordable."
In the settlements announced Monday:
Steven Oscherowitz, affiliated with a firm called Federal Loan Modification Law Center, was ordered to pay $11.5 million. The FTC said Oscherowitz's firm received that much from consumers in the alleged scam. His firm charged as much as $3,000 to each client, most of which was required in advance. The firm often failed to deliver loan modifications, the FTC said. In addition to being banned from selling mortgage relief services, Oscherowitz is not permitted to operate telemarketing businesses, the FTC said.
Oscherowitz couldn't be reached for comment Monday. The agency said it continues to pursue cases against others linked to the firm.
Loss Mitigation Services and Direct Lender were ordered to pay a total $6.2 million. Dean Shafer, Marion Anthony "Tony" Perry and Bernadette Perry were banned from selling the services, but the $6.2 million judgment against them was suspended because of their inability to pay. The FTC said they falsely promised loan modifications if homeowners paid as much as $5,500. They couldn't be located for comment.
Salvatore and Nicholas Puglia, of Hope Now Modifications and Hope Now Financial Services Corp. were ordered to pay $5.3 million. The FTC said that judgment will be suspended when they surrender all the funds in their bank accounts, which had been frozen by the court.
The agency said the Puglias and the firms falsely claimed they were linked with the federal government's Hope Now program and that they could achieve modifications in nearly all cases — or would refund customers' money. They couldn't be located for comment. The attorney representing them in the case, Richard Gallucci, didn't immediately return a telephone call seeking comment.