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A Florida-based scammer will be banned from the mortgage modification business as part of a settlement resolving Federal Trade Commission charges that he tricked financially strapped consumers into paying for mortgage-relief services that he never provided.

“Years after the economic meltdown, the FTC is still exposing and shutting down bogus mortgage relief schemes,” said Jessica Rich, Director of the Bureau of Consumer Protection. “This case highlights the depths to which scammers will sink to defraud struggling homeowners, and our resolve to hold them accountable.”

According to the FTC’s complaint, filed earlier this year, Jonathan Herbert and his Fort Lauderdale-based operation falsely claimed that it was affiliated with the federal government’s Making Homes Affordable assistance program, and that it would renegotiate consumers’ mortgages to reduce monthly payments by several hundred dollars. The FTC alleged that Herbert hid his involvement in the scam through the use of stolen identities, shell corporations, and other ruses.

Deceptively using the Federal Deposit Insurance Corporation’s (FDIC) logo and calling itself the “Federal Debt Commission,” the “Federal Mortgage Marketplace,” and the “Federal Assistance Program,” Herbert’s companies promised consumers their mortgage modifications would be completed quickly and for free. They also told consumers to stop communicating with their lenders, and to send their “new” mortgage payments to addresses in Washington, DC, which turned out to be UPS Stores, not government office buildings. These payments were then forwarded to Herbert in Florida.

Although Herbert and his companies collected more than $800,000 in payments from hundreds of consumers, they made no effort to obtain loan modifications and did not apply any of the money to pay down consumers’ existing mortgages. As a result, many consumers lost their homes, as well as thousands of dollars.

The court order settling the FTC’s charges imposes a judgment of $815,865. It also bans Herbert for life from any involvement with all debt-relief programs, including mortgage loan modifications. The order also prohibits him from misrepresenting any aspect of a financial product or service or the terms and conditions associated with such products or services.

The order also prohibits the defendants from disclosing any of the consumer information obtained through their fraudulent operations and prohibits anyone associated with them from collecting payments from any consumers who agreed to buy their fake mortgage relief services.

For consumer information about avoiding mortgage and foreclosure rescue scams, see Home Loans.

The Commission vote approving the proposed final order was 5-0. The stipulated final order was filed in the U.S. District Court for the Southern District of Florida, and entered on December 12, 2014.

The court order announced today settles the FTC’s charges against: FMC Counseling Services, Inc.; FDC Assoc Group, Inc.; FDC Businesses, Inc.; FMC Review Corporation, NDR Group, Inc.; FMC Consultants Group, Inc., and Jonathan L. Herbert, individually and doing business as Federal Debt Commission, Inc; FDC Financial, Inc., and FDC Consultants, Inc.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Contact Information

Mitchell J. Katz
Office of Public Affairs

James Davis
FTC Midwest Region