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Van Hollen Announces Judgment Against Federal Loan Modification Law Center, LLP


MADISON – Attorney General J.B. Van Hollen announced today that the Wisconsin Department of Justice has obtained a default judgment against Federal Loan Modification Center, LLP (“FLM”) for violations of Wisconsin law while marketing purported loan modification and foreclosure rescue services. The California-based company was ordered to pay $105,754 and is enjoined from conducting business in further violation of the law.


According to the State's complaint, FLM marketed purported loan modification and foreclosure rescue services to distressed homeowners in Wisconsin under the guise that it was part of a federal program, despite having no affiliation with the federal government. It informed homeowners that attorneys would work on their behalf, demanded up-front fees and even had the audacity to advise some homeowners to stop talking to their lenders and to stop making their mortgage payments in order to “expedite” the modification process. FLM collected as much as $3500 in up-front fees from Wisconsin homeowners then failed to provide the services promised or refunds.


“The Wisconsin Department of Justice joins the FBI, the Federal Trade Commission and other state and federal law enforcement agencies in warning distressed homeowners to look out for loan modification and foreclosure rescue fraud,” Attorney General Van Hollen said. “We continue to advise homeowners to never pay up-front fees for promised services but to go directly to their lenders for assistance or to contact a HUD- approved housing counselor who will work with the homeowner for free.”


The Judgment was entered by Dane County Circuit Court Judge, Juan B. Colas. Assistant Attorney General Nelle Rohlich represented the State.


Homeowners at risk of foreclosure or in need of mortgage counseling should find a HUD certified housing counseling agency at HUD's website or at (800) 569-4287. These counselors will work with homeowners at no charge.


The Federal Trade Commission also obtained an order against FLM in July 2010.