The agreement resolves the dispute with Consumer First Legal Group and four of its attorneys, Thomas G. Macey, Jeffrey J. Aleman, Jason Searns and Harold E. Stafford, who were accused of having charged "millions of dollars in illegal advance fees to financially-distressed homeowners for legal representation the defendants promised but did not provide."

In its initial complaint filed in 2014, the agency said the defendants had deceived clients in danger of foreclosure when providing mortgage-relief services, in part by collecting loan modification payments before they had come to agreements with lenders. The perpetrators also instructed borrowers to not contact their mortgage companies and failed to issue required disclosures, the CFPB stated. 

The allegations all violated the regulation previously known as the mortgage assistance relief services rule. 

Following an order against Consumer First Legal and its attorneys, a U.S. district court imposed a fine of nearly $60 million in restitution and civil money penalties in 2019. Three of the lawyers were also prohibited from conducting future business involving foreclosure or mortgage relief, while Stafford was given a five-year ban.

That judgment came after The Mortgage Law Group, a bankrupt firm Macey, Aleman and Searns previously operated, had already been found guilty in the scam.

An appeal by defendants led to an affirmation of the original court's rulings but reduced the amount of penalties to just under $30 million and shortened the length of some of the attorneys' bans to eight years in 2022. A subsequent appeal was filed, along with a cross-appeal from the CFPB.

In this week's resolution, the CFPB, Consumer First Legal and its attorneys agreed to dismiss their appeals. The $12 million settlement consists of $10.9 million in consumer redress and a $1.1 million penalty paid into the CFPB's victims relief fund.

The eight-year bans on Macey, Aleman and Searns, as well as the five-year term against Stafford remain.

The CFPB filed the original lawsuit in 2014 as part of a coordinated effort between several regulators targeting operators of foreclosure relief scams. The resolved case was one of three from the bureau, while the Federal Trade Commission lodged six suits. Meanwhile, attorneys representing 15 different states took 32 actions against fraudsters.

In January, the FTC began a claims process for fraud victims in one of its 2014 cases. Over 2,500 clients of Lanier Law or its associated businesses are eligible to collect from the proceeds of a 2016 ruling against the defendants. In the order, one of the scam perpetrators, Michael Lanier, was also disbarred. 

In a similar FTC case separate from the 2014 joint effort, the commission last month said homeowners scammed by the firm Consumer Defense would be receiving more than a cumulative $1.2 million after courts determined it had violated mortgage assistance relief services policies. Consumer Defense had promised its clients loan modifications upon payments of monthly fees, but in some cases, the company never contacted the lenders.