Phoenix – Attorney General Mark Brnovich announced today a consent judgment obtained against Arizona-licensed Foreclosure Attorney Brent Randall Phillips. Phillips violated the Arizona Consumer Fraud Act by engaging in fraudulent and deceptive practices when offering loan modification services to struggling homeowners facing foreclosure. The judgment bars Phillips and his law firms, Phillips Law Center, P.L.C., d/b/a Randall Law Group, and Farmers Law Group from conducting mortgage loan modification services in the State of Arizona or on behalf of Arizona consumers and obtains restitution for victims.
“These homeowners were about to lose their homes to foreclosure and trusted Phillips to help them, but he betrayed their trust,” said Attorney General Mark Brnovich. “This office will not tolerate schemes that target and prey on vulnerable consumers who are struggling to pay their mortgages or facing foreclosure.”
This consent judgment resolves the State’s lawsuit, filed in July 2014, alleging that Phillips and his law firms violated the Arizona Consumer Fraud Act, the Federal Mortgage Assistance Relief Services Rule (the MARS Rule), and various other state laws and regulations. The lawsuit was part of a joint federal-state sweep by 15 states, the Federal Trade Commission, and the Consumer Financial Protection Bureau targeting operators of fraudulent mortgage rescue or loan modification schemes that preyed on delinquent homeowners or those facing foreclosure.
The State’s lawsuit alleged that Phillips and his law firms engaged in deceptive practices while operating as law firms that advertised and performed loan modification services. According to the consent judgment, Phillips and his law firms:
- sent out advertisements to approximately 20,000 Arizona consumers that created the misleading impression of being a communication from the consumer’s mortgage loan holder and offering mortgage restructuring, a principal reduction, payment relief, interest reductions, or the elimination of a second mortgage;
- used marketing materials that contained misleading promises about their services, such as unsubstantiated representations that the consumer could “rest assured with certainty” that they would obtain mortgage relief for the consumer; and
- misrepresented that they had the right to charge and collect illegal upfront fees for mortgage assistance relief.
Today’s settlement provides for restitution of $65,000 to approximately 20 consumers, $15,000 for attorneys’ fees and costs, and $450,000 in civil penalties. The State will release its claim to $400,000 of the civil penalties if the Defendants comply with all of the terms set forth in the consent judgment.
The case was handled by Assistant Attorney General Alyse Meislik.
Consumers who are having trouble paying their mortgage should contact their lenders directly. In addition, HUD-approved counseling agencies, which provide services to struggling borrowers at no cost, may be located at hud.gov, or consumers may visit www.azmortgageresource.gov or call (602) 542-1797 in Phoenix or toll free outside of Metro Phoenix, (855) 256-2834. If you believe you have been a victim of mortgage fraud or any type of consumer fraud, you may file a consumer complaint online.
For more information, members of the media may contact Mia Garcia, Spokesperson and Director of Media Relations at (602) 339-5895 or Mia.Garcia@azag.gov.