A total of 322 distressed borrowers that a law firm with ties to disbarred attorney Michael Lanier took money from in loan modification scams will receive more than $222,000 in refunds, according to the FTC. Checks paid to these borrowers must be cashed within 90 days.

The action is one of many stemming from a massive 2014 state-federal enforcement action known as Operation Mis-Modification, which continues to have ripple effects. Such scams were widespread after the Great Recession's housing crash, and persist today.

The scam the Federal Trade Commission is issuing refunds for through Analytics Consulting is one of several that multiple regulators pursued in efforts to prove violations of the FTC Act and Mortgage Assistance Relief Services Rule.

The Jacksonville, Florida-based Lanier Law, which operated under multiple names, charged borrowers a monthly fee of $500-plus or $1,000 to $4,000 upfront for what it said were 85% to 100% odds it could obtain a modification for them, according to the FTC.

The law firm then failed to either lower financing costs at all, or not to the extent promised, the commission said. In some cases Lanier reportedly asked consumers not to pay their mortgages while modifications were in process and claimed to be investigating mortgage company defects.

Other law group names Lanier reportedly used included Surety, Redstone, Fortress and Liberty & Trust.

"These entities purported to be law firms based in the District of Columbia, but they were in fact 'virtual office[s]' for Lanier's operations in Florida," court documents show.

Earlier this year, the Consumer Financial Protection Bureau extracted a $12 million settlement from another entity that Operation Mis-Modification previously pursued called Consumer First Legal Group.

That group and individuals associated with it also charged "illegal advance fees to financially distressed homeowners for legal representation the defendants promised but did not provide." 

More recent regulatory and legal actions taken in response to claims of modification fraud include a case that the FTC and California have jointly pursued against individuals with ties to Home Matters USA. A federal court judge handed down a $19 million penalty in that case.

The Home Matters case shows that scams associated with purported offers of relief in return for a fee came to be widespread amid the pandemic too, even though the degree of mortgage distress resulting from it was far lower than what was seen following the Great Recession.

The purported modification services in that lawsuit, which marked the first time the California Department of Financial Protection worked with the FTC to pursue a civil action, "were associated with a government program related to COVID-19 relief," according to court documents.

More than 3,000 borrowers, many of whom were older adults or veterans, were reportedly victimized by Home Matters, and the penalty was called one of the largest seen under California's consumer protection law.