Borrowers lost over $6M in mortgage modification scam, regulators say

Two defendants bilked hundreds of distressed mortgage borrowers in Southern California out of millions of dollars, according to a complaint unsealed by a federal court on Monday.

The complaint, a joint action by the Federal Trade Commission and California Department of Financial Protection and Innovation, alleges that defendants Roger Scott Dyer and Dominic Ahiga charged upfront fees for loan relief that in “numerous instances” they failed to deliver.

The U.S. District Court filing marks the first joint action by the FTC and the DFPI to rely, in part, on the enforcement of the 2020 California Consumer Financial Protection Law. Their complaint, which was filed in California’s Central District, alleges that Dyer and Ahiga were in violation of CCFPL, the Federal Trade Commission Act, the COVID-19 Consumer Protection Act, the FTC’s Mortgage Assistance Relief Services Rule and the Telemarketing Sales Rule.

“Illegal mortgage relief assistance schemes prey on the most vulnerable homeowners and are a significant threat to the generational wealth that homeownership provides for consumers,” California DFPI Commissioner Clothilda Hewlett said in a press release. “The DFPI has taken strong decisive action against the companies behind this scheme using the California Consumer Financial Protection law to put a stop to their illegal activities.”

Dyer and Ahiga (a.k.a. Michael Dominic Grinnell) did business under several company names, according to the complaint. These included Amstar Service Group, Atlantic Pacific Service, Home Matters USA, Golden Home Services America, Academy Home Services, Green Equitable Solutions, South West Consulting Enterprises, Apex Consulting & Associates, Infocom Entertainment and Home Relief Service of America.

The defendants allegedly collected monthly fees for modification and foreclosure prevention services that totaled an estimated $6.3 million while advising borrowers to leave mortgages unpaid and not contact their servicers, the FTC/DFPI complaint alleges.

“In some instances, consumers have been notified by their mortgage companies that they have started, or intend to start, foreclosure proceedings because the consumers followed defendants’ instructions to cease making payments on their mortgages,” the FTC and DFPI said in the complaint.

Other legal complaints have been filed against the defendants and related entities in California, Connecticut, North Carolina, Ohio, Oregon and Washington, according to a DFPI press release.

Hewlett recently brought another target of multistate actions in the mortgage industry to a close, settling a matter involving alleged loan-officer education fraud. She became the DFPI’s commissioner in September of last year after Manny Alvarez stepped down.