FTC stops bogus mortgage ‘loan mod’ business

A federal court banned three men and their company from the mortgage modification business and ordered them to pay nearly $19 million for consumer refunds.

The Federal Trade Commission sued First Universal Lending and its owners – Sean Zausner, David Zausner, and David J. Feingold – as part of a federal-state crackdown on mortgage foreclosure rescue and loan modification scams.

The defendants allegedly deceived distressed homeowners throughout the country with phony claims that they would negotiate with lenders to modify their mortgages and make them more affordable.

The defendants encouraged homeowners to stop making mortgage payments, saying lenders would not negotiate unless they were at least a few months behind in their payments. After charging consumers up to $7,000 in up-front fees, the defendants often did little or nothing to help them, the FTC charged.

The FTC asks consumers to report foreclosure rescue and mortgage modification scams to FTC.gov or by calling 1-877-FTC-HELP.