Consumer Financial Protection Bureau Files Complaint Alleging Defendants Engaged in Unlawful Conduct in Connection with Mortgage Assistance Relief Services

Ballard Spahr LLP

Ballard Spahr LLP

On September 6, 2019, the Bureau filed a complaint in federal court in the Central District of California against Certified Forensic Loan Auditors, LLC (CFLA) and Andrew Lehman (Lehman) in connection with their offering, advertising, marketing, and selling of purported financial advisory and mortgage assistance relief services, and against Michael Carrigan (Carrigan), who was CFLA’s sole auditor during the relevant time period.  Among the services offered were securitization audits, which included legal conclusions and recommendations, and litigation documents, which were templates of pleadings to be filed in connection with a homeowner’s response to a foreclosure proceeding.  According to the complaint, CFLA and Lehman charged and collected $1,495 from consumers before producing and delivering one of these packages of documents, and they had sold more than 2,000 securitization audits since 2014.

The Bureau alleges that CFLA and Lehman promoted these materials on its website, in marketing e-mails, and on marketing telephone calls with representations that the securitization audits would stop foreclosure and keep homeowners in their homes, as well as claims that the documents were prepared by the “Nation’s Most Well Respected Attorneys in the Foreclosure Defense Industry.”  According to the complaint, CFLA and Lehman made no effort to determine whether the audits and litigation documents actually led to the advertised outcomes and, in fact, knew that the audits were meritless.

The Bureau alleges that CFLA and Lehman violated Regulation O, which governs mortgage assistance relief services, by taking payment before consumers executed a written agreement with their loan holder or servicer that contained any offer of relief obtained by CFLA and Lehman, and by misrepresenting the benefits, performance, or efficacy of their services.  Additionally, the Bureau alleges the defendants violated the Consumer Financial Protection Act by misrepresenting the expertise of those involved in preparing the materials, by taking advantage of consumers’ inability to understand the material risks, costs, and conditions of the services CFLA and Lehman were selling, and by providing financial services that were not in conformity with federal consumer financial law.  Allegations against Carrigan include knowingly or recklessly providing substantial assistance to CFLA and Lehman in their violations of the CFPA and Regulation O.

The Bureau and Carrigan agreed to a stipulated final judgment and order that would permanently restrain Carrigan from, either directly or by assisting others, providing, advertising, marketing, promoting, offering for sale, selling, or producing any mortgage assistance relief service or financial product or service.  Additionally, the stipulated order imposes a $493,403.04 civil money penalty, which will be suspended other than $5000 because of Carrigan’s limited ability to pay.  The suit against CFLA and Lehman is still pending in federal court in the Central District of California.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ballard Spahr LLP | Attorney Advertising

Written by:

Ballard Spahr LLP

Ballard Spahr LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.