Decree Bars Ads Accused of Fleecing Homeowners
(CN) - National Media Connection and the National Mortgage Help Center can settle claims that its advertisements served only to scam struggling homeowners, a federal judge ruled.
The Neighborhood Assistance Corporation of America (NACA) sued the companies and their owner, Matthew Goldreich, in April 2013 claiming the companies inticed homeowners by advertising loan-modification assistance, then charged them for references to what turned out to be predatory lenders.
Many homeowners who responded to the defendants' ads "discovered that the National Mortgage Help Center was a sham - or worse, have been scammed by Goldreich's and NMC's unscrupulous clients - were and continue to be disgusted by the fraud to which they fell victim and consequently have ceased participating in the market for mortgage assistance services," the complaint said.
NACA claims it offers legitimate services to consumers, and that Goldreich scams them by competing deceptively and unfairly and violating trademark.
The National Mortgage Help Center is a "fictitious entity" Goldreich created to profit from "the current economic crisis by developing fraudulent advertisement campaigns designed to gain the trust of desperate consumers and then selling those consumers as sales leads to the highest bidder - often to predatory financial services companies peddling bogus products," NACA said.
In a consent decree issued Tuesday, U.S. District Judge Charles Breyer approved a settlement agreement that prohibits Goldreich and his companies from airing any further advertisements suggesting they provide loan modifications, foreclosure defenses, or mortgage assistance.
NACA's attorney, Casey McNamara, attributed the victory to NACA's continuing "efforts to stop companies from preying on struggling homeowners through mortgage modification fraud."
Earlier this year, McNamara successfully assisted NACA in a lawsuit against a company that charged homeowners fees for loan modifications they never received.