CFPB Exercises Enforcement Authority Against Alleged Mortgage Modification Scheme

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On July 18, the CFPB filed suit against a group of California companies and individuals alleged to have orchestrated a mortgage modification scam in violation of the Consumer Financial Protection Act and Regulation O. According to the CFPB, the defendants engaged in deceptive acts by promising loan modifications in exchange for an advance fee and misrepresenting affiliation with government entities, while taking little or no action to assist borrowers. This is the first known instance in which the CFPB has brought an enforcement action in court. The CFPB is seeking preliminary and permanent injunction, as well as rescission or reformation of contracts, refund of moneys paid, restitution, and disgorgement or compensation for unjust enrichment.

 

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