FTC Temporarily Halts Deceptive Practices Of Mortgage Relief Operation

The Federal Trade Commission continued its crackdown of deceptive mortgage relief companies this week as a federal court granted the agency’s request to temporarily halt a Los Angeles-based company that charged consumers excessive upfront fees for services they never performed.

The FTC announced today that a court granted an order against Wealth Educators, Inc. and its president for deceiving consumers with costly relief programs.

According to the FTC complaint [PDF], since at least October 2012 Wealth Educators – operating under several names including Legal Educators USA & Co., Stargate Mutual & Associates, Providence Financial Advocates, and Providence Financial Audits – used outbound telemarketing and websites to deceptively pitch their programs to consumers in need of mortgage help.

Many of the targeted consumers were homeowners in financial trouble, whom the company promised it could help by lowering their monthly mortgage payment, lowering their mortgage interest rate, or obtaining loan modification or restructuring.

The company’s website advertised Wealth Educators as ““America’s Leading Home Preservation Legal Services,” saying that it would “act on behalf of homeowners to work with your lender and avoid the lengthy and costly process of foreclosure and the stressful act of eviction that follows.”

Wealth Educators allegedly charged consumers an up-front fee ranging from $1,000 to $5,000, promising the money would be fully refunded if the company didn’t provide the promised relief.

Despite promises of a refund, consumers tell the FTC that when they attempted to get their money back from the company they were unable to do so.

The FTC claims that while Wealth Educators told many consumers they could obtain a loan modification, typically through a government-sponsored program, and even quoted a specific amount consumers’ mortgage payments would be reduced, the company often did not provide the expected relief.

Additionally, the complaint claims that Wealth Educators advised consumers to stop communicating with their lenders, delaying them from discovering that Wealth Educators had not obtained the promised mortgage relief.

The FTC charges that Wealth Educators violated the FTC Act and the Mortgage Assistance Relief Services (MARS) Rule, now known as Regulation O, which bans mortgage foreclosure rescue and loan modification service providers from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable.

In addition to halting the company’s activities, the FTC seeks to freeze its assets to ensure the preservation of funds for possible consumer redress.

Court Temporarily Halts Company From Offering Mortgage Relief Services [FTC]