Court Accepts $39 Million Settlement Between CFPB and Mortgage Relief Law Firm

CFPB  •  Mortgage

On June 21, 2017, a federal judge in the Western District of Wisconsin accepted a Stipulated Final Judgment and Order (“Stipulated Judgment​“) based on an agreement between the CFPB and the bankruptcy trustee of a now defunct mortgage relief law firm.  The Stipulated Judgment comes three years after the CFPB filed its initial complaint​ against the mortgage relief law firm in July 2014, seeking injunctive and monetary relief.

The Complaint alleged that the mortgage relief firm collected fees in exchange for mortgage assistance relief services, including loan modifications, to more than 10,000 consumers.  The Complaint further alleged that the law firm never actually provided those services and, as a result, committed​ various violations of the Mortgage Assistance Relief Services Rule (MARS Rule), 12 C.F.R. pt. 1015, and the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531, 5536(a), 5564, and 5565.  Under the Stipulated Judgment, the allegations made in the Complaint are neither admitted nor denied.

The Stipulated Judgment requires the law firm to permanently cease business activities, including providing or offering ​any mortgage assistance relief product or service, or any debt relief product or service.  The law firm, through its bankruptcy trustee, must also pay $18.3 million to the CFPB for consumer relief and a civil penalty of $20.8 million.

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