Newsroom

The Consumer Financial Protection Bureau announced Tuesday that it is taking action against two companies for alleged mortgage loan modification scams that have taken in more than $10 million.

At the request of the CFPB, U.S. District Court Judges in the State of California have ordered a halt to the Gordon Law Firm and the National Legal Help Center, and frozen their assets. The CFPB says that both companies charged consumers for services that falsely promised to prevent foreclosures or renegotiate troubled mortgages.

The CFPB complaints allege that the defendants in both cases violated the Dodd-Frank Act and Regulation O, formerly known as the Mortgage Assistance Relief Services Rule. These laws prohibit unfair, deceptive, or abusive acts or practices and protect distressed homeowners from mortgage relief scams.

The bureau alleges that both companies violated the law by:

• illegally charging for large upfront fees;
• deceptively claiming to be affiliated with government agencies and/or programs;
• misrepresenting that they would secure loan modifications for consumers; and
• instructing consumers to stop paying their mortgages and stop contacting their lenders.

The CFPB also alleges that both companies typically stopped returning consumers' phone calls and emails after receiving thousands of dollars in illegal fees from distressed homeowners.

More information about the complaints is available online, including the full text of the National Legal Help Center complaint, the full text of the Temporary Restraining Order entered by the court against National Legal Help Center and the CFPB's Memorandum in support of its application for the TRO against National Legal Help Center.The full text of the Gordon Law Firm complaint is also available online.

The CFPB has also posted a blog on how to spot mortgage scams and where to find help.