WASHINGTON—The CFPB and the State of Florida were granted a final judgment in a case against companies accused of scamming distressed homeowners into paying illegal advance fees.
The judgment went against Hoffman Law Group and its corporate affiliates.
Working together, five companies tricked consumers into paying millions of dollars in illegal upfront fees to join frivolous lawsuits that the companies falsely claimed would pressure banks to modify their loans or provide foreclosure relief, the CFPB stated in a release. The court found the corporate defendants liable for $11,730,579 – the full amount of illegal fees paid by consumers – and ordered them to pay a $10-million civil penalty, in addition to 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 in a statement. “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 lawsuit named Hoffman Law Group (formerly Residential Litigation Group), its operators, Michael Harper, Benn Willcox, and attorney Marc Hoffman, and its affiliated companies, Nationwide Management Solutions, Legal Intake Solutions, File Intake Solutions, and BM Marketing Group, all based in North Palm Beach, Fla. The Hoffman Law Group was a law firm set up to give the appearance that consumers in financial distress needing to modify their mortgage loans or save their homes from foreclosure would get specialized help from attorneys, the CFPB stated. The related companies, which were run by Harper and Willcox, existed to market and support the scheme.