The Federal Trade Commission (FTC) issued a ban on eight companies marketing loan modification services. The FTC’s statement alleges that “the marketers charged up-front fees and falsely claimed they could get their mortgage loans modified or prevent foreclosure on their homes.”

The following defendants and settlements were named in the FTC’s recent press release:

Federal Loan Modification Law Center - Steven Oscherowitz and other associates settled with the FTC on charges that they advertised and sold a deceptive “Federal Loan Modification program.” Under this program Oscherowitz and his company would charge troubled homeowners up to $3000, often required up-front, in exchange for loan modifications that rarely delivered the promised results, according to the FTC complaint.

• The FTC settlement order includes the following conditions against Oscherowitz:
• Permanently banned from selling mortgage relief services and from telemarketing and good or service.
• Prohibited from misrepresenting any good or service, selling or otherwise benefiting from customers’ personal information
• Required to dispose of customer information properly
• Imposes an $11.5 million judgement, representing the amount customer paid to the defendant while involved in the alleged loan modification scheme

Any moneys collected in satisfaction of the judgement will be paid to injured consumers or the US Treasury. Two additional individuals and three corporate defendants have also settle with the FTC in association with this complaint. The FTC continues to pursue five other defendants in this matter.

Loss Mitigation Services - Dean Shafer, Marion Anthony “Tony” Perry, and Bernadette Perry (aka Bernadette Carr and Bernadette Carr-Perry) settled FTC allegations for falsely assuring consumers they could provide loan modification for an up-front fee of $5,000.

The defendants were were principals of Loss Mitigation Services, Inc. (LMS) and Synergy Financial Management Corporation, doing business as Direct Lender or DirectLender.com (Direct Lender). These individuals allegedly misrepresented themselves as being affiliated with or an actual department of the consumer’s mortgage lender or servicer.

Shafer and the Perrys were also alleged to have promised consumers refunds if they were unable to provide a loan modification. In many cases, the defendants were not able to secure a loan modification and consumers lost their homes, according to the FTC complaint.

• The FTC settlement order includes the following conditions against Shafer and the Perrys:
• Banned from selling mortgage relief services
• Imposes a $6.2 million judgement (suspended due to their inability to pay)

The FTC also secured a default order against Loss Mitigation Services (LMS) and Direct Lender, banning them from selling mortgage relief services and ordering the payment of $6.2 million.

Under the settlement orders, Shafer and the Perrys are banned from selling mortgage relief services. The orders also impose a $6.2 million judgment that is suspended due to their inability to pay. In addition to the orders against Shafer and the Perrys, the FTC obtained a default order against LMS and Direct Lender, banning them from selling mortgage relief services and ordering them to pay $6.2 million.

Hope Now Modifications - Salvatore and Nicholas Puglia, Hope Now Modifications LLC and Hope Now Financial Services Corporation settled FTC allegations that they falsely assured consumers they could obtain mortgage loan modifications and would refund their money if they were unsuccessful. The defendants also claimed to be affiliated with the HOPE NOW Alliance, a free federal homeowner assistance program, according to the FTC complaint.

The FTC settlement order includes the following conditions against the defendants:

• Banned from selling mortgage relief services
• Prohibited from misrepresenting any good or service, violating the Telemarketing Sales Rule, selling or otherwise benefiting from their customers’ personal information
• Required to properly dispose of their customer information

The FTC settlement order also places a judgement of nearly $5.3 million that will be suspended when the defendants surrendering all of the funds in their bank accounts, which are currently frozen by court order.

These settlements are just the latest in a series of investigations focused on marketers targeting financially distressed consumers. Recently, the FTC has also issued warnings to free credit report websites and settlements against debt relief services.

Note: All FTC settlement orders are just that, settlements. They do not constitute an admission by the defendant of violating and laws.

For those homeowners that are having trouble paying their mortgage the FTC has released this video to help you avoid foreclosure scams: