TALLAHASSEE, Fla. – July 24, 2014 – (RealEstateRama) — Attorney General Pam Bondi and the federal Consumer Financial Protection Bureau, obtained an emergency temporary restraining order and appointment of a receiver in a joint lawsuit filed in U.S. District Court, Southern District of Florida against Florida-based Hoffman Law Group (“HLG”) and related entities. The order prohibits HLG defendants from doing business with consumers and freezes HLG’s bank accounts.
The North Palm Beach law firm and affiliated companies allegedly received millions of dollars from distressed homeowners across the country in typical fees of $6,000 per homeowner to sign up and additional monthly payments of $500. In the lawsuit, Marc Hoffman is named as the attorney and owner of HLG, and Michael Harper and Benn Wilcox, non attorneys, as managers of the business and telemarketing operation at HLG.
HLG and its agents promised homeowners financial relief in the form of mortgage debt forgiveness, loan modifications and other foreclosure-related relief, and cash payments through participation in mass-joinder lawsuits that HLG was filing against numerous mortgage lenders across the country. The joint state-federal lawsuit filed against HLG alleges that HLG and related entities and individuals are violating the federal Mortgage Assistance Relief Services Rule (“MARS”) and state laws by collecting fees upfront from consumers before obtaining a loan modification , misrepresenting to consumers the services and relief they would receive, failing to make disclosures required by law, and other violations.
“Florida’s distressed homeowners should not have to worry about being swindled by scammers who hide behind law firms to try to avoid the MARS Rule,” stated Attorney General Pam Bondi, “I appreciate the Consumer Financial Protection Bureau’s partnership in this effort to protect Florida’s homeowners.”
Mass joinder scams, such as the one alleged in this lawsuit, are essentially foreclosure rescue scams. Telemarketers pitch to distressed homeowners that if they join in a lawsuit with multiple plaintiffs, lenders will be induced to pay large cash payments and provide extensive mortgage relief to each homeowner to settle the case. Mass joinder scams often tout that they have an attorney on staff to represent each homeowner, but, in truth, that attorney likely is not reviewing the facts of each homeowner’s claim, is not directly handling the litigation that may be filed, and often is not even licensed to practice in the homeowner’s state. Consumers ultimately receive little or no mortgage assistance and are often worse off after signing up
The services provided by HLG are subject to the MARS Rule, which regulates mortgage assistance services. Under this rule, businesses must:
· Obtain a written loan modification or mortgage relief agreement from the lender before charging fees to the customer;
· Disclose that they are not affiliated with or approved by the government or a government program;
· Inform customers that lenders may not accept their loan modification offers;
· Inform customers that they could lose their home and their credit will suffer if they are advised to stop paying their mortgage; and
· Inform customers that if they don’t accept offers for mortgage assistance obtained from the lender, they do not have to pay for the provided services.
HLG allegedly violated the MARS Rule by failing to comply with these requirements and by making false or misleading claims relating to the following facts:
· Likelihood of consumers receiving desired results;
· Consumers’ payment and other mortgage obligations;
· The extent of services the HLG claimed it would perform;
· The legal representation that HLG claimed it would be provide to consumers;
· The amount of money a consumer will save by utilizing their services; and
· The cost of their services.
HLG and related entities and individuals are also facing charges of unfair and deceptive trade practices and civil theft. Attorney General Pam Bondi and the CFPB obtained an emergency court order on July 16 appointing a receiver to control HLG and related entities and to enjoin Harper, Wilcox, and Hoffman from their involvement in the business. All individuals are facing civil penalties, restitution, disgorgement of money taken in by the companies, and restrictions on future business activities of the defendants.
Attached is the link to the Complaint and the Court’s Order. To access the receiver’s website, please visit Bernet-Receiver.com. Anyone wanting to file a complaint with our office may go online to MyFloridaLegal.com or call 1-866-9-NO-SCAM. Also link to Florida Bar’s ethics alert relating to lawyers and foreclosure rescue scams.
Media Contact: Jenn Meale
Phone: (850) 245-0150