At the end of May 2015, a Florida court ruled in favour of the Consumer Financial Protection Bureau and the state over claims a law firm charged illegal monies to consumers desperate for relief from foreclosure.
It now means North Palm Beach law firm Hoffman Law Group are now liable for $11.7 million in illegal upfront fees it charged. In the lawsuit it was deemed the law firm was guilty of charging customers for foreclosure mitigation services that often ended nowhere.
As well as being liable for repaying the $11.7 million, it was also charged a $10 million penalty of civil monies that will have to be paid back to the Consumer Financial Protection Bureau. Furthermore, another $6 million needs to be paid to the state of Florida.
But despite the ruling and financial penalties, much of the money will be uncollectable from Hoffman Law because the business just isn’t worth that amount of money. It is now in receivership after the court appointed someone to take over all assets. The company will be liable to fork out just $0.65 million after the state and the CFPB successfully obtained a temporary restraining order off the group and froze its assets.
Directors at the CFPB spoke in court about the scrupulous nature of Hoffman Law and other associates in promising homeowners struggling to pay off their mortgages into a scam that ended up leading into deeper financial hardship.
A press release announced that the state and finance protection bureaus were working hard to protect struggling homeowners against companies that just wanted to scam already-suffering mortgage payers. The predatory practices were deemed unlawful and bad players are now being held accountable for their actions.
A federal law was in place which was aimed at dealing with mortgage assistance relief, Hoffman Law violated this law with impunity. The type of violation it was practising beggared belief. The firm consulted with struggling homeowners that were desperate to keep hold of their properties and told them that it would begin all negotiations with the mortgage lender and service providers (in the case of leaseholders) and that the mortgage holder should allow the firm to handle all enquiries and that they must no longer communicate with the lender.
Then the firm charged a staggering $6,000 advanced up-front fee followed by another $495 monthly fee. Any firm trying to discourage consumers contacting their lenders is unlawful in federal law.
If you feel that you have been mislead by a company claiming to service the needs of consumers who are in need of help in regards to the home, mortgage or foreclosure, be sure to contact the Consumer Financial Protection Bureau.