Banking and Finance Law Daily Wrap Up, MORTGAGES—FTC prevails on summary judgment in mass joinder 'mortgage relief' case, (Sep 20, 2017)

By Colleen M. Svelnis, J.D.

The Federal Trade Commission has prevailed in its case against individuals who were principals and controlling persons of law firms offering mortgage relief services to consumers. The U.S. District Court for the Central District of California has granted summary judgment for the FTC against Jeremy Foti and Charles Marshall, who were acting through Brookstone Law and Advantis Law. According to the FTC, the litigation against all of the defendants in this matter has now been resolved. Previously, the FTC had settled against other individuals and the corporate entities involved in the cases (see Banking and Finance Law Daily, Jan. 11, 2017 and June 17, 2016).

The two men offered purported mortgage relief through the law firms, marketing mass joinder litigation, a "mortgage relief" scam where, unlike in class-action lawsuits, in the event of trial each plaintiff would have to prove his or her case separately. According to the FTC, no consumer ever achieved any mortgage relief in these cases. The FTC reported numerous false and misleading statements from the legal services providers who were offering purported mortgage relief. The individuals falsely told homeowners they would recover "at least $75,000" or their homes "free and clear" through so-called mass joinder lawsuits.

The court concluded that the facts demonstrate that the corporate law firms violated the FTC Act and the Mortgage Assistance Relief Services Rule as a matter of law, with the only remaining issue as to whether the two individuals were liable for injunctive relief. The court found that the "undisputed facts" showed they both participated directly in the acts or practices or had authority to control them.

Companies: Advantis Law P.C.; Advantis Law Group P.C.; Brookstone Law P.C.

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