FTC sues, says three mortgage relief firms are phony

In another round of crackdowns on companies offering bogus mortgage relief, the Federal Trade Commission slapped lawsuits Tuesday on three companies, including a California firm.

The state firm, doing business as American Mortgage Consulting and as Home Guardian Management Solutions, both in Newport Beach, has had numerous consumer complaints filed against it in the last 12 months, according to the West Sacramento-based Better Business Bureau office.

According to the FTC, the companies named in Tuesday's lawsuits collected monthly payments or upfront fees of anywhere from $1,500 to $4,500 for phony loan modification services that did little or nothing to help struggling homeowners.

"As soon as the company got the consumers' money, they stopped doing anything," said David Horn, FTC assistant regional director, based in Seattle.

"There are definitely victims in California," said Horn, noting that details on the number of victims and their losses would not be available until a court-appointed receiver sifts through thousands of complaints filed with the FTC, Better Business Bureau or state attorneys general.

A federal court judge also issued a temporary restraining order and froze the companies' assets.

The three companies did telemarketing nationwide, using a host of business names. (See a complete list of names: www.ftc.gov/opa/2012/10/phonymortgage.shtm).

A spokesman for American Mortgage Consulting Group in Newport Beach said it's done nothing wrong.

"We opened our books and we have nothing to hide. We made every effort to help these homeowners to make sure these (loan) modifications went through," said Marc Lazo, attorney for American Mortgage owner Mark Nagy Atalla.

Lazo confirmed that the company collected upfront monies, but said they were only for legal fees for potential lawsuits against lenders.

Under state and federal law, it's illegal to collect upfront fees for loan modification services.

The Better Business Bureau's northeast California office said both of Atalla's companies have an F rating, based on consumer complaints.

Tom Pool, state Department of Real Estate spokesman, said the recent FTC cases "tell you that there are still lots of underwater homeowners who fall victim. They need to educate themselves."

Before signing on with any mortgage relief firm, check to be sure it's a licensed real estate broker at DRE's website, www.dre.ca.gov. In Sacramento, call DRE at (916) 227-0864.

The other two FTC defendants are Expense Management America, which allegedly cold-called thousands of U.S. consumers from its Mon-treal call center; and Prime Legal Plans/Reaching U Network, which charged consumers up to $750 monthly "while little or nothing" was done to save their homes from foreclosure.

"We're trying really hard to make this problem go away," said FTC's Horn. "We need consumers to be vigilant and try to resist the temptation that somebody who calls them on the phone can solve all their problems."

For legitimate help with mortgage problems, go to: www.makinghomeaffordable.gov.

• Read more articles by Claudia Buck

Order Reprint