$3 million in consumer redress is suspended, $40,000 penalty assessed against mortgage relief services firm, its CEO under settlement with CFPB

A stipulated final judgment over a firm’s violations of federal consumer financial protections related to the sale of financial advisory and mortgage assistance relief services suspends the imposition of $3 million in consumer redress against the firm and imposes $40,000 in civil money penalties (CMPs), the Consumer Financial Protection Bureau (CFPB) announced Thursday.

The CFPB filed its lawsuit against Certified Forensic Loan Auditors LLC (CFLA), its president and chief executive officer Andrew Lehman, and its auditor Michael Carrigan last September. The original complaint (it was amended in November) alleged that CFLA and Lehman engaged in deceptive and abusive acts or practices in violation of the Consumer Financial Protection Act (CFPA) and charged unlawful advance fees related to marketing and selling financial advisory and mortgage assistance relief services to consumers in violation of Regulation O and the CFPA. It said Carrigan violated the CFPA as well as Regulation O in assisting CFLA and Lehman in their activities.

The CFPB’s complaint stated that CFLA and Lehman charge a fee of $1,495 and collect it from consumers before producing and delivering an audit and litigation documents, and before they obtain any mortgage-assistance-relief for consumers. Since 2014, it stated, they had sold more than 2,000 audits to consumers, either directly or through intermediaries. Presuming a fee was collected for each audit, that works out to nearly $3 million in illegal advance fees to CFLA.

The court’s order permanently bans CFLA and Lehman from providing mortgage assistance relief services or financial advisory services, the bureau said. The suspended judgment for redress and the $40,000 assessed in CMPs, it noted, “account for CFLA’s and Lehman’s limited ability to pay based on sworn financial statements.”

Carrigan, as proposed last year and under a stipulated final judgment and order in October, is barred from providing mortgage assistance relief services, or consumer financial products and services. Full payment of a $493,000 civil money penalty assessment was suspended based on his limited ability to pay; he was required to pay just $5,000.

That $5,000 plus the $40,000 assessed against CFLA and Lehman, based on how the CFPB treats such funds, are expected to be deposited into the bureau’s Civil Penalty Fund. “Assuming continued available funds, the Bureau will work to provide full relief from this fund to eligible harmed consumers,” the bureau said.

Consumer Financial Protection Bureau Announces Settlement With Foreclosure Relief Services Company and Its Owner

RR: Consumer bureau sues foreclosure relief firm, its CEO and auditor over deceptive and abusive acts, practices (Sept. 6, 2019)