A sign on a foreclosed house in Tigard, Ore., last year. (Don Ryan / Associated Press…)
Reporting from Washington — A judge has shut down a Santa Ana mortgage-relief operation after federal officials accused it of falsely promising help for struggling homeowners to avoid foreclosure or get their mortgage payments reduced.
The operation -- five companies and three websites controlled by Sameer Lakhany of Santa Ana -- took in more than $1 million by victimizing hundreds of consumers with two alleged scams, the Federal Trade Commission said Thursday.
The companies are Credit Shop, Fidelity Legal, Titanium Realty, Precision Law Center Inc. and Precision Law Center LLC. The websites are HouseHoldRelief.org, FreeFedLoanMod.org and MyHomeSupport.org. The websites were not operating Thursday.
U.S. District Judge Cormac J. Carney in Santa Ana granted the FTC's request for a temporary restraining order against the companies and froze their assets.
One of the alleged scams involved charging homeowners $6,000 to $10,000 each to join a class-action lawsuit against their lenders that could help stop foreclosure proceedings or get major concessions, such as cutting the homeowners' interest rate in half or reducing their principal to 70% of the home's value.
The lawsuits were filed, but neglected or dismissed, the FTC said. The suit against Lakhany and his operation is the agency's first case involving so-called mass-joinder lawsuits.
In the other alleged scam, the operation charged homeowners $795 to $1,595 for a "forensic loan audit" that would find violations by a lender at least 90% of the time, the FTC said.
The violations would supposedly give a homeowner leverage to get his or her mortgage modified. If the audit did not turn up any violations, the homeowner got the promise of a 70% refund while still getting a mortgage modification, the FTC said.
The companies also falsely described themselves as nonprofit, free, accredited or as housing counselors certified by the federal Housing and Urban Development Department, the FTC said.
Scam watch: Tax refunds, Christian rock concert, loan mods
Homeowners, beware of firms charging a fee for mortgage help
Refund checks sent to alleged victims of mortgage discrimination by Bakersfield company