Homeowners facing foreclosure are often tempted to turn to desperate measures to save their homes, making themselves easy targets for scammers promising mortgage relief.
In their first civil enforcement action in federal court, the Consumer Financial Protection Bureau targeted a Los Angeles law firm that allegedly charged distressed homeowners exorbitant fees in exchange for loan modification services that were never delivered, the Wall Street Journal reported.
A California federal district judge has frozen the assets of the firm, Division One Investment and Loan Inc. and Processing Division LLC, and its partners, Chance Gordon and Abraham Pessar.
Court documents indicate that the law firm has been advertising mortgage assistance relief services since 2010. Since then, the California state bar and agencies in four other states have received complaints about the firm’s disreputable practices.
Instead of helping consumers renegotiate their mortgage loans, the firm allegedly charged some homeowners $2,500-$4,500 in mortgage relief fees and told the homeowners to stop paying their mortgage, which ultimately led to foreclosure.
Gordon’s attorney, Gary Kurtz, denied the allegations saying the firm helped more than 90% of its 2,000 clients keep their homes.