Prepared remarks of Steve Antonakes, Deputy Director of the Consumer Financial Protection Bureau

MARS Enforcement Action Press Call

WASHINGTON, DC (July 23, 2014) — Thank you for joining us on the call today and my thanks to Katie Fallow at the FTC for her and her staff’s hard work on this issue. Today, both the Consumer Financial Protection Bureau and the Federal Trade Commission are announcing recent action we’ve taken against companies and individuals that took advantage of underwater homeowners looking for foreclosure relief.

The lawsuits we filed allege that consumers were lured in by deceptive marketing, including inflated success rates, and false promises of legal advice.  Then, the companies illegally required consumers to pay upfront fees to begin the mortgage modification process.  Often, consumers never received loan modifications and were left worse off than they began.

One of the lawsuits filed by the Bureau was against Clausen & Cobb Management Company, Inc., its owners, Alfred Clausen and Joshua Cobb, and their business associate, attorney Stephen Siringoringo.  Their joint operation allegedly charged initial fees ranging from $1,995 to $3,500, in addition to monthly fees of $495, to thousands of California homeowners in distress.

The second lawsuit was filed against The Mortgage Law Group (TMLG), the Consumer First Legal Group, and their principals Thomas Macey, Jeffrey Aleman, Jason Searns, and Harold Stafford. Our suit alleges that the two groups took in over $19.2 million in fees from distressed homeowners nationwide in just two years.

The third lawsuit was filed against the Hoffman Law Group.  Since April 2012, the Hoffman Law Group enterprise has allegedly accepted millions of dollars in illegal advance fees, which begin with an upfront fee of $6,000 and a $495 monthly maintenance fee thereafter.  Because the enterprise’s conduct was ongoing and we believed consumers were going to be harmed, we sought and received a court order appointing a receiver to take over the enterprise’s operations, freezing their assets, and prohibiting the illegal conduct.

We filed the lawsuit against the Hoffman Law Group jointly with the Florida Attorney General’s office, and I want to thank Attorney General Bondi and her staff for their close cooperation with our team.  I also want to thank the 14 other states that similarly announced actions today against companies that prey on distressed homeowners.  The states worked in close coordination with our enforcement staff to ensure that the actions announced today have a substantial impact.

In each of the three lawsuits that the Bureau is announcing today, the Bureau alleges that the companies violated federal consumer financial law when they charged consumers millions of dollars in illegal, upfront fees for mortgage modifications. As mortgage assistance relief service providers, the companies are legally prohibited from requesting or receiving payment from consumers before a mortgage-modification agreement is in place.  In some cases, we heard from consumers who said they could not even reach anyone at a company once they had paid the initial fee.

The companies involved in today’s sweep are also alleged to have deceptively marketed their services to consumers.  The firms would falsely claim they had already helped thousands of consumers get millions of dollars in savings on their mortgage payments.  They would lead consumers to believe they would be receiving legal representation—when, in fact, many consumers never spoke with a lawyer or had their case reviewed by one.

When consumers would meet with representatives of these companies, they were often misled to believe that they were eligible for a loan modification. Other consumers were promised that they would receive relief within a few months, but that relief never came.

In addition to the lawsuits announced today, the Bureau is also releasing materials to help consumers recognize the red flags of mortgage relief scams—particularly when someone is pledging to give them legal help.  Red flags include guarantees from a lawyer or someone offering legal help that the consumer will get a loan modification or demands that a consumer pay upfront before they get the modification.

The materials will also help consumers better understand what it means to authorize a third party, such as a mortgage modification provider, to act on their behalf. Many mortgage modification scammers require consumers to send a third-party authorization form to their mortgage servicer so that the servicer shares information with the scammer.  We want consumers to know what to expect before they begin the modification process, so they can avoid being scammed.

At the Consumer Bureau, we are fully committed to promoting responsible practices in the marketplace and ensuring that consumers are treated fairly.  The lawsuits announced today aim to stop companies from engaging in practices that not only violate the law but take advantage of distressed homeowners who are just trying to find a way to pay their bills.  Companies should know better and consumers deserve better.  Thank you.

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit

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