CFPB gets $27.7 million judgment against foreclosure scammers

by Ryan Smith29 May 2015
The Consumer Financial Protection Bureau and the state of Florida today obtained a $27.7 million judgment against companies accused of orchestrating a foreclosure relief scam.

The CFPB and the Florida attorney general obtained the judgment against Hoffman Law Group and affiliated companies accused of using deceptive marketing practices and scamming homeowners into paying illegal advance fees. According to the CFPB, five companies worked in concert to trick customers into paying illegal upfront fees in order to join frivolous lawsuits. The companies claimed the lawsuits would pressure banks to modify customers’ loans or provide foreclosure relief.

The court found the defendants liable for the full amount of legal fees paid by consumers – more than $11.7 million – and ordered them to pay a $10 million penalty, plus additional penalties to the state of Florida.

“These companies preyed on vulnerable consumers who were trying to save their homes from foreclosure,” said CFPB Director Richard Cordray. “The false promises made by these companies lured struggling homeowners into scams that led to greater financial hardship. We are working to protect consumers from illegal predatory practices by holding bad actors accountable for their actions.” 

“Scamming homeowners worried about losing their homes is not only illegal, it is despicable, and thanks to the great work of my consumer protection division and the Consumer Financial Protection Bureau, these defendants will pay for preying on Florida homeowners facing foreclosure,” said Florida Attorney General Pam Bondi. “Foreclosure rescue scammers cannot evade the law by hiding behind a law firm. It is discouraging that there are attorneys out there that will allow their licenses to be used by shady companies to target people facing foreclosure.”

The companies named in the suit were Hoffman Law Group (formerly Residential Litigation Group) along with its operators, Michael Harper, Benn Willcox and Marc Hoffman, and affiliated companies Management Solutions, Legal Intake Solutions, File Intake Solutions and BM Marketing Group. The Hoffman Law Group was set up to give the appearance that homeowners needing mortgage modifications or foreclosure relief would receive specialized help from attorneys, according to the CFPB. The affiliated companies, which were run by Harper and Willcox, existed only to support the scheme.