06/26/2012 02:39 pm ET

Howard Shmuckler, Convicted Mortgage Scam Artist, Sentenced To 7 Years In Prison

A Virginia scam artist has been sentenced to more than seven years in prison for running a mortgage modification company that falsely promised to save people's homes in the wake of the housing bubble's collapse.

A federal judge in Virginia sentenced 68-year-old Howard Schmuckler to 7.5 years in prison for charging homeowners upfront fees in return for mortgage modifications that rarely happened.

"At a time when homeowners across the nation are struggling to keep their homes, Shmuckler actively targeted the most vulnerable of them with his mortgage modification scam," Christy Romero, Special Inspector General for the Troubled Asset Relief Program, said in a statement.

Shmuckler charged desperate homeowners an upfront fee, guaranteeing successful mortgage modifications, Romero said. "Shmuckler performed little if any service in return for the fees, and in many cases, the homeowners' properties fell into foreclosure."

Shmuckler pleaded guilty to six counts of wire fraud in April, according to a release from SIGTARP (PDF). From June 2008 through October 2009, Shmuckler's former company, The Shmuckler Group, took $2.8 million from roughly 865 clients and only won mortgage modifications for 4.5 percent of them.

Many struggling homeowners have turned to outside "experts" for help with mortgage modifications after confronting extreme difficulty with their own lenders. But the best place to go for help with a mortgage is either a trusted lawyer or a housing counselor certified by the U.S. Department of Housing and Urban Development. Help from HUD-certified counselors comes free of charge.

Recently-enacted state and federal laws forbid mortgage modification companies from charging up front for mortgage modification services, with some exceptions for lawyers.

Shmuckler claimed to be a lawyer even though he had been disbarred. He had also been indicted for bank fraud and various other crimes.

Shmuckler maintained his innocence on a crazy website until a court order made it come down.