FTC, 23 states act to stop sham loan consultants

Prosecutors nationwide are filing 189 lawsuits and cease-and-desist orders against loan modification consultants accused of bilking desperate homeowners.

Federal Trade Commission Chairman Jon Leibowitz and California Attorney General Jerry Brown announced the legal actions Wednesday in Los Angeles. They are part of a nationwide sweep of sham consultants conducted by the FTC and 23 states.

The California attorney general's office says the five Superior Court lawsuits it filed in Orange and Los Angeles counties include allegations against 21 individuals and 14 companies.

The lawsuits seek millions of dollars in civil penalties, restitution for victims, and a permanent injunction to keep the companies and the defendants from offering mortgage-relief services.