FTC Acts Against Two Family-Owned Mortgage Foreclosure Rescue Operations

The Federal Trade Commission has charged a Florida couple with violating federal law by deceiving consumers into believing that their homes could be saved from foreclosure in return for a fee. At the Commission’s request, a federal court halted the defendants’ allegedly unlawful practices pending further litigation. The FTC seeks to bar them from further violations and make them forfeit their ill-gotten gains and pay redress for consumers. In another matter, four family members in Texas who engaged in similar practices have agreed to settle FTC charges for allegedly misleading consumers about their foreclosure rescue services.

According to the FTC’s complaint in the first case, the Florida defendants offer their services by mail and then give a sales pitch to consumers who call their toll-free number. As part of the pitch, the defendants ask questions and appear to qualify consumers. The defendants say they can negotiate a solution with consumers’ mortgage companies, and they often guarantee that consumers can avoid foreclosure.

Once consumers are “qualified,” the defendants charge a so-called mediation fee of $900 and a $300 administration fee, the complaint states. They also lead consumers to believe that, if foreclosure is not stopped and no solution is found, the $900 fee will be refunded. In most instances, however, the defendants do not stop the foreclosure and refund either nothing or only a portion of the $900.

The defendants are Stephanie Dietschy, Darin Dietschy, and United Home Savers, LLC, all based in Florida. They are charged with violating the FTC Act by falsely representing that they would stop foreclosure in all or virtually all instances, and that they would refund most of consumers’ fees in all instances where foreclosure cannot be stopped.

The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Middle District of Florida. The court issued a temporary restraining order to halt the defendants’ unlawful business practices and freeze their assets. The FTC and the defendants have asked the court to issue an agreed preliminary injunction that would continue the asset freeze and the conduct prohibitions contained in the order.

In the second case, four Texas defendants and their companies have agreed to settle FTC
charges that they deceived homeowners facing foreclosure by falsely claiming they could prevent foreclosure in return for an up-front fee ranging from $500 to $1,200. The settlements bar them from further law violations and require them to pay more than $137,000 in redress for affected consumers.

According to the Commission’s complaint, in numerous instances, the defendants did not prevent foreclosure for their clients; rather, they often ensured foreclosure by not taking promised actions or taking only minimal steps not calculated to prevent foreclosure. The defendants also increased the threat of foreclosure by inducing consumers to wait passively for weeks rather than contact the lender and explore possible options. In addition, they allegedly did not honor their promise to fully refund all fees if they could not stop foreclosure, which resulted in consumers sometimes losing the fees and their homes.

The defendants, all based in Texas, are Elias H. Taylor and his companies, National Hometeam Solutions, LLC, National Financial Solutions, LLC, and Elant, LLC; Everard Taylor and his company, Evalan Services, LLC; Emanuel Taylor and his company, United Financial Solutions, LLC; and Edwin P. Taylor, Sr., and his company, Nationwide Foreclosure Services, LLC. They are charged with violating the FTC Act by falsely representing that they would stop foreclosure in all or virtually all instances, and that they would refund most or all fees if foreclosure could not be stopped.

Under the four proposed settlements, the defendants are barred from misrepresenting any product or service. In marketing any mortgage foreclosure rescue service, they are barred from misrepresenting:

• that foreclosure can or will be stopped, postponed, or prevented in all or virtually all instances;
• the likelihood that those outcomes can or will be achieved;
• the degree of past success of any such efforts;
• the terms of any refund or guarantee;
• the likelihood that a consumer will receive a full or partial refund if a foreclosure is not stopped, postponed, or prevented;
• any record of consumer satisfaction or complaints or approval or ratings by the Better Business Bureau or any other consumer advocacy or consumer protection association; or
• any fact material to a consumer’s decision to purchase any mortgage foreclosure rescue service.

Also under the proposed orders, the defendants cannot sell, rent, or otherwise disclose personal information about anyone who provided them with such information at any time in connection with the marketing of mortgage foreclosure rescue services. The settlements also
contain record-keeping provisions to allow the FTC to monitor compliance with the orders.

One of the proposed orders imposes a $342,400 judgment against National Hometeam Solutions, LLC, National Financial Solutions, LLC, Elant, LLC, and Elias H. Taylor, jointly and
severally. The judgment will be suspended upon payment of $90,492, largely from assets frozen by the court in February. The second proposed order imposes a $217,878 judgment against Evalan Services, LLC and Everard Taylor, jointly and severally. The judgment will be suspended upon payment of $5,000.

The third proposed order imposes a $34,800 judgment against United Financial Solutions, LLC and Emanuel Taylor, jointly and severally. The judgment will be suspended upon payment of $19,108 from assets frozen by the court. The fourth proposed order imposes a $22,760 judgment against Nationwide Foreclosure Services, LLC, and Edwin P. Taylor, Sr., jointly and severally.

The Commission vote to authorize staff to file the proposed stipulated permanent injunctions and orders was 4-0. The documents were filed in the U.S. District Court for the Eastern District of Texas, Sherman Division.

NOTE in United Home Savers and National Financial Solutions: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

NOTE in National Financial Solutions: These stipulated final orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's Web site provides free information on a variety of consumer topics.

(FTC File No. 0723251 and X080046)
(Mortgage Foreclosure Rescue)