WASHINGTON — Federal prosecutors say they've reached a settlement in a Florida lawsuit featuring allegations of discriminatory housing practices.
The Department of Justice said the U.S. District Court for the Middle District of Florida had entered a consent order resolving Fair Housing Act claims against Advocate Law Groups of Florida P.A., Jon B. Lindeman Jr., Ephigenia K. Lindeman, Summit Development Solutions USA LLC, and Haralampos “Bob” Kourouklis.
The court entered a $4.5 million judgement against them, although most of the amount is suspended because prosecutors say it appears the defendants have a limited net worth.
"In addition to monetary relief, the consent order permanently enjoins defendants from providing any mortgage relief assistance services, such as loan modifications or foreclosure defense services, and imposes reporting and recordkeeping requirements for defendants’ other real-estate activities," the DOJ wrote.
The DOJ accused the defendants of targeting Hispanic homeowners with predatory mortgage loan modification services. Prosecutors say the defendants used Spanish-language advertising to falsely promise to cut mortgage payments in half.
"Defendants made the same representations to hundreds of Hispanic homeowners in person, promising lower payments in exchange for thousands of dollars of upfront fees and continuing monthly fees of as much as $550, which defendants claimed were 'non-refundable,'" The DOJ wrote in a news release. "Many of the targeted homeowners had limited English proficiency."
Prosecutors say the defendants instructed homeowners not to talk with their lenders and to cease monthly mortgage payments. The lawsuit claims the defendants "did little or nothing" to secure the promised loan modifications, and many of the homeowners defaulted on their mortgage payments and went on to lose their houses.
“Targeting homeowners with deceptive advertisements and predatory schemes because of their national origin and limited English proficiency is reprehensible and illegal,” wrote Assistant Attorney General Kristen Clarke, who works in the Civil Rights Division, in a statement. “Homeowners of color and other protected groups must be safeguarded from discriminatory targeting that can lead to grave financial loss, including loss of one’s home. We will continue to use our federal civil rights laws to protect the rights of homeowners.”
U.S. Attorney Roger B. Handberg, in a statement, called the settlement a "major achievement."
The lawsuit stemmed from complaints originally filed with the Department of Housing and Urban Development, which referred the situation to the DOJ.
“It is outrageous that these defendants engaged in business practices that were not only illegal and discriminatory, but also resulted in hard-working homeowners defaulting on their mortgages and losing their homes due to foreclosure,” HUD Principal Deputy Assistant Secretary for Fair Housing and Equal Opportunity Demetria McCain wrote in a statement.
McCain commended the DOJ for enforcing the Fair Housing Act.
