A California group accused of victimizing more than 1,000 consumers has agreed to stop promoting its "forensic loan audits" and "mass joinder" lawsuits to homeowners seeking relief from mortgage-related problems.
The Federal Trade Commission (FTC) said the promoters deceived cash-strapped consumers into believing they could hold onto their homes and reduce their mortgage payments by either suing their mortgage lenders in so-called “mass joinder” lawsuits or buying “forensic loan audits.”
All of the defendants, including two individuals and seven companies, will surrender assets and be prohibited from making deceptive claims about any product or service, and all but one are banned from marketing mortgage- and debt- relief services.
The FTC filed a complaint in 2012 against Santa Ana-based Sameer Lakhany and five companies he controlled. The agency later added three more defendants.
"Specialty law firm"
In the first alleged scam, Lakhany and defendants Brian Pacios, Precision Law Center, Inc., Precision Law Center LLC, National Legal Network, Inc., and Assurity Law Group, Inc., allegedly held themselves out as a specialty law firm called Precision Law Center, making the false promise to consumers that if they sued their lenders along with other homeowners in so-called “mass joinder” lawsuits, they could obtain favorable mortgage concessions from their lenders or stop the foreclosure process.
According to the complaint, they charged $6,000 to $10,000 in advance, but failed to follow through with the suits, all of which were dismissed shortly after filing.
The second alleged scam, involving Lakhany and defendants The Credit Shop, LLC, Fidelity Legal Services LLC, and Titanium Realty, Inc., typically charged consumers between $795 and $1,595 for a so-called “forensic loan audit.”
The complaint alleged that these defendants falsely portrayed themselves as nonprofit organizations using the domain names “HouseholdRelief.org,” “MyHomeSupport.org,” and “FreeFedLoanMod.org.”
They told consumers the loan audits would find lender violations 90 percent of the time or more, and that this would force lenders to give them better mortgage terms. In fact, the complaint alleged that consumers rarely if ever obtained better mortgage terms as a result of these “forensic loan audits.”