Compliance Audit Group Offering Mortgage Loan Modifications
Without License

December 1, 2015

The Connecticut Department of Banking (DOB) urges consumers to verify the license of any company that offers mortgage loan modifications.  State law requires that anyone providing these services in Connecticut be licensed as a “debt negotiator” with the DOB.  Those operating without licenses are likely committing fraud.  If you have been contacted by a company offering to help modify your mortgage, call the DOB at 1-800-831-7225 to find out if they are licensed to do that type of business.

On November 16, 2015, the DOB issued an administrative order against Compliance Audit Group for offering mortgage loan modification services even though the company was not licensed to do so in Connecticut.  The order demands repayment of any fees and interest paid by Connecticut debtors who entered into an agreement for debt negotiation services with Compliance Audit Group.  The order further demands that Compliance Audit Group cease and desist from further debt negotiation activity.  If the company fails to respond the DOB may impose a civil penalty of $100,000 per violation.  The order was sent to the company by certified mail, which was returned to the DOB marked “Return to Sender.”  Prior mail correspondence to Compliance Audit Group had been unanswered.

Red Flags
Two Connecticut residents allege that they paid Compliance Audit Group $2,950 to represent them in the modification of their mortgage loan.  This greatly exceeds the $500 maximum fee that a debt negotiator may charge for their services, and which may only be collected if the debt negotiator successfully performs the services.  Compliance Audit Group guaranteed that it could obtain a modification for the consumers, but they did not receive a modification nor did the company provide a refund.

The following warning signs could indicate that this is a mortgage loan modification scam:

• You are asked to pay large, up-front fees.
• Mortgage loan modification help is offered by a company calling itself a “homeowner consultant” or “financial counselor” and not a DOB-licensed “debt negotiator.”
• The company advises you not to make your mortgage payments.
• The company advises you not to contact your mortgage lender or provider because the person or company offering you assistance will handle all of the details; and
• The company advises you to make future payments to a new person or firm without informing your current mortgage lender or provider.

What to Do
Determine whether lenders are properly licensed using the "Verify a License" feature at the Department’s website, www.ct.gov/dob, or by calling 1-800-831-7225, before doing business with anyone offering mortgage loan modifications.  The Department of Banking strongly recommends that consumers deal only with those lenders that are properly licensed to conduct business.  

Background
It is important to note that many legitimate companies offer mortgage loan modifications.  Properly licensed debt negotiators will, for a fee, offer to help customers obtain mortgage modifications and other debt settlement services.  They typically negotiate on behalf of a consumer the terms of a consumer’s obligation to a mortgagee or creditor, including 1) negotiation of a short sale of residential property; 2) providing services related to avoiding or delaying actual or anticipated foreclosure proceedings; and 3) addressing the delinquency and default of a mortgage loan.

The only types of businesses or individuals that may conduct this type of business without a license are:  1) attorneys practicing law in Connecticut, 2) banks and credit unions, 3) licensed debt adjusters and 4) non-profits.  The DOB provides a list of licensed debt negotiators on its website at www.ct.gov/dob. 

Report Suspected Fraud
Connecticut residents, if you are suspicious of unlicensed activity by a lender, report directly to the Department of Banking, at 1-800-831-7225 or online at www.ct.gov/dob.

If you feel you have been the victim of a loan scam please contact the Federal Trade Commission at 1-877-FTC-HELP (382-4357) or online at www.ftc.gov; or contact the Consumer Financial Protection Bureau (855) 411-CFPB or online at www.consumerfinance.gov.  Because the scammers have access to bank account information and social security numbers, victims should consider themselves victims of identity theft and take appropriate precautions.  The Federal Trade Commission has information for victims of identity theft available online at www.ftc.gov.

If you feel you have been the victim of a loan scam involving the Internet please contact the Internet Crime Complaint Center online at www.ic3.gov.

If you feel you have been the victim of a loan scam and are concerned about your personal financial information, contact your banking institution, and the three major credit bureaus.