Mortgage Debt Relief Firm Settles With FTC for $19 Million
A federal court last month banned three men and their debt relief business from offering mortgage loan modification services and ordered them to pay nearly $19 million in consumer refunds under terms of a settlement agreement with the Federal Trade Commission.
Florida-based First Universal Lending and owners Sean Zausner, David Zausner, and David J. Feingold, were sued by the FTC in November 2009 as part of Project Stolen Hope, an ongoing federal and state crackdown on debt relief firms that offer fraudulent loan modification and mortgage foreclosure rescue services.
In its lawsuit, the FTC alleged that First Universal falsely promised consumers that it would negotiate loan modifications on their behalf in exchange for advance fees up to $7,000. The firm was also accused of telling consumers that it couldnâ€™t negotiate with lenders unless consumers stopped making mortgage payments. However, once consumers paid advance fees and stopped making mortgage payments, First Universal allegedly did little or nothing to help consumers, often leaving them in worse financial shape (â€śFTC Stops Bogus Mortgage Loan Modification Business,â€ť FTC press release, June 21, 2011).
The court halted the defendantsâ€™ operation, froze their assets, and ordered them to take down the companyâ€™s websites and disable its computers. The settlement agreement imposes a judgment of over $18.8 million and bans the defendants from the mortgage debt relief business. The defendants are also permanently prohibited from misrepresenting material facts about goods and services; violating the federal Telemarketing Sales Rule; selling or using consumersâ€™ personal information; failing to properly dispose of customer information; and collecting payments from customers.
The FTC encourages people to report mortgage loan modification, foreclosure rescue, and other debt relief scams by calling 1-877-FTC-HELP or by filing a complaint online at www.FTCComplaintAssistant.gov.
Read the FTCâ€™s settlement agreement with First Universal:
Stipulated Permanent Injunction and Final Order: Federal Trade Commission v. First Universal Lending Inc., et al. Filed May 25, 2011.
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