National Legal Help Center, Najia Jalan, Richard K. Nelson
Enforcement, Debt Relief, Mortgages
In 2012, the CFPB sued the National Legal Help Center and Chance Gordon and his law firm, Gordon & Associates, for “loan modification scams” that allegedly charged homeowners to reduce their mortgage payments with “little, if any, meaningful assistance to modify homeowners’ mortgage loans or prevent foreclosure,” which is a “violation of federal law.” The CFPB alleged that the organizations “illegally charged large upfront fees, deceptively claimed to be affiliated with government agencies and/or programs, misrepresented that they would secure loan modifications for borrowers and instructed borrowers to stop paying their mortgages and stop communicating with lenders” resulting in clients losing their homes and damage their credit ratings. The two mortgage loan modification scams “took in more than $10 million” and “ripped off thousands” of homeowners. The U.S. District judge “temporarily froze the defendants’ assets and put a receiver in charge of their records and bank accounts.”
The CFPB alleged that the organizations “illegally charged large upfront fees, deceptively claimed to be affiliated with government agencies and/or programs, misrepresented that they would secure loan modifications for borrowers and instructed borrowers to stop paying their mortgages and stop communicating with lenders.”
“The CFPB also allege[d] that, after pocketing thousands of dollars in illegal fees from one distressed homeowner after another, the defendants in both cases typically stopped returning consumers’ phone calls and emails. In the end, many consumers learned that the defendants had not contacted their lenders or obtained any meaningful relief for them.” [Heather Anderson, “CFPB Legal Action Halts Two Alleged California Mortgage Scammers,” Credit Union Times, 12/11/12]
The defendants, Najia Jalan, Richard Nelson, and National Legal Help Center, “operated 165 web addresses, many of which mimicked federal housing relief programs.” In 2012, the OCC issued a warning on its website stating that the National Legal Help Center “does not appear to be legitimate and is likely an ‘up front-fee’ scam.” The CFPB claimed the National Legal Help Center told its clients to “stop talking with their lenders and to ignore foreclosure notices” and to “stop paying their mortgage.” This resulted in clients losing their homes and damage their credit rating.
The National Legal Help Center “advertised in all 50 states.” The U.S. District judge “issued a temporary restraining order and appointed a temporary receiver.” [Ronald Campbell, “Feds Shut Down Santa Ana Loan Mod Shop,” The Orange County Register, 12/11/12]
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