A Florida mortgage firm has agreed to a settlement of almost $19 million over allegations it deceived delinquent borrowers, collected huge up-front fees and told borrowers to stop making mortgage payments. But, according to the government, the defendants did little or nothing to help borrowers.
On one side of the settlement is First Universal Lending.
The Palm Beach Gardens, Fla.-based company was originally targeted in 2009 as part of the government’s Project Stolen Hope.
According to an announcement from the Federal Trade Commission, a lawsuit was filed during November 2009 in U.S. District Court for the Southern District of Florida. Named as defendants were the company and its owners — Sean Zausner, David Zausner, and David J. Feingold.
The complaint alleged that the defendants encouraged borrowers to miss their mortgage payments so that they would be eligible for a loan modification. They also charged up-front fees of as much as $7,000.
Problem was, “the defendants often did little or nothing to help them,” the FTC stated.
So the consumer protection agency obtained a court order enabling it to shut down the business, freeze assets and disable its Web sites. The FTC also obtained an $18.8 million judgment against the trio and their company.
On Tuesday, the FTC announced that it had reached a settlement with the defendants. No admission of guilt, however, was made by any of them.
As part of the settlement order, the defendants are banned from the mortgage-relief services businesses.
It’s not the first time the First Universal was targeted by a government agency.
Last year, Missouri Attorney General Chris Koster sued the company claiming that it charged illegal up-front fees, advised some borrowers to stop making payments and “appears to do little or nothing for most of its customers.”
Federal Trade Commission v. First Universal Lending, LLC, a limited liability company, Sean Zausner, individually and as owner, officer, or manager of First Universal Lending, LLC, David Zausner, individually and as owner, officer, or manager of First Universal Lending, LLC, and David J. Feingold, individually and as officer or manager of First Universal Lending, LLC.
Civil Action No. 09-CV-82322, FTC File No. 092 3130, November 2009 (U.S. District Court Southern District of Florida).
