As part of an ongoing effort against scams that target financially distressed consumers, the Federal Trade Commission (FTC) has banned several marketers from selling mortgage modification or foreclosure relief services.

According to the FTC, the marketers allegedly charged homeowners up-front fees and falsely claimed they could get their mortgage modified or prevent foreclosure on their homes. Settlements regarding these allegations have been met through three separate actions.

Steven Oscherowitz settled FTC charges that he and others advertised and sold a so-called “Federal Loan Modification program.” They charged up to $3,000, much of which they required up-front, but the company which they were doing business under – Federal Loan Modification Law Center – often failed to live up to the promised results, the FTC said.

The settlement order against Oscherowitz permanently bans him from selling mortgage relief services and from telemarketing any good or services, and it prohibits him from misrepresenting any good or service and selling or otherwise benefitting from customers’ personal information. The order imposes an $11.5 million judgment against Oscherowitz, which represents the amount consumers paid to the defendants while he was involved in the alleged scheme.

Two individual and three corporate defendants have already settled charges against them in this case, and the FTC continued to pursue its case against five other defendants.

The FTC has also reached settlements with Dean Shafer, Marion Anthony “Tony” Perry, and Bernadette Perry, who were principals of Loss Mitigation Services, Inc. (LMS) and Synergy Financial Management Corporation, doing business as Direct Lender.

According to the FTC’s complaint, Shafer and the Perrys misrepresented that the companies were a department of, or affiliated with, the consumer’s lender or mortgage servicer. The FTC said the defendants falsely promised that a loan modification was assured or virtually assured if consumer paid an advance fee of up to $5,000. Additionally, Shafer and the Perrys were accused of falsely claiming that consumer would receive refunds if LMS or Direct Lender failed to secure a loan modification.

Under the settlement orders, Shafer and the Perrys are banned from selling mortgage relief services. The orders impose a $6.2 million judgment that has been suspended due to the defendants’ inability to pay. In addition to the orders against Shafer and the Perrys, the FTC obtained a default order against LMS and Direct Lender, banning the companies from selling mortgage relief services and ordering them to pay $6.2 million.

Brothers Salvatore and Nicholas Puglia, Hope Now Modifications LLC, and Hope Now Financial Services Corporations also settled FTC charges that they falsely claimed they could obtain mortgage loan modifications in all or virtually all cases and would refund consumers money if they failed. Additionally, these defendants allegedly claimed that were affiliated with or, or part of, the HOPE NOW Alliance, a free federal homeowner assistance program.

The settlement order forbids the defendants from selling mortgage relief services, and they are permanently barred from misrepresenting any good or service, violating the Telemarketing Sales Rule, and selling or otherwise benefitting from their customers’ personal information. The order imposes a judgment of almost $5.3 million, which will be suspended when the defendants surrender all of the funds in their bank accounts, which were frozen by the court.

The FTC’s continued efforts to crack down on deceptive mortgage marketers comes as consumer complaints about these companies are on the rise. According to a recent survey conducted by the Consumer Federation of America (CFA), the fastest-growing consumer complaint in 2009 was bogus offers to help consumers save their homes from foreclosure.

“Consumers who are desperately trying to fend off collection agencies or save their homes from foreclosure are prey to scammers who offer to help them and then take their money and run,” said Susan Grant, CFA’s director of consumer protection.