Additional Information for LowerMyDebts.com, LLC

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government's allegations, which have not yet been proven.

As of February 14, 2012, regarding the Federal Trade Commission (FTC) File No. 1023146, (U.S. Mortgage Funding), at the request of the Federal Trade Commission, a U.S. District Court put the mortgage relief business permanently off limits to marketers who allegedly charged thousands of consumers up to $2,600 each, based on bogus promises to provide loan modifications that would make mortgages much more affordable.

The case against U.S. Mortgage Funding, Inc. is part of the FTC's continuing crackdown on scams that target homeprincipal
s who are behind in their mortgage payments or facing foreclosure. According to the agency, the scheme caused consumer losses of nearly $19 million. All but two of the defendants settled with the agency, while the two remaining corporate defendants received default judgments.

The FTC alleged that the defendants used direct mail, the Internet, and telemarketing to target homeprincipal
s - even those whose lenders had denied them modifications or who had been sent foreclosure notices. The defendants typically asked for half of the fee up-front, falsely claiming a success rate of up to 100 percent, according to the complaint.

The defendants deceptively claimed they could prevent foreclosure, that they were affiliated with or approved by consumers' lenders, and that they would refund consumers' money if they failed to deliver promised services, according to the FTC. They told consumers not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments would demonstrate the consumers' hardship to lenders, the FTC alleged.

The FTC complaint charged U.S. Mortgage Funding, Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, David Mahler, Jamen Lachs, and John Incandela, Jr., also known as Jonathan Incandela, Jr., with violating the FTC Act and the FTC's Telemarketing Sales Rule. An amended complaint added Louis Gendason as a defendant.

The court orders ban all the defendants from providing mortgage relief services, and Mahler and Debt Remedy Partners, who also provided debt relief services, are banned from continuing to do so.

The court orders for U.S. Mortgage Funding, Inc. and Lower My Debts.Com LLC ban them from engaging in any telemarketing. The remaining defendants are prohibited from violating the Telemarketing Sales Rule, and from misrepresenting any facts relevant to marketing or selling any product or service. Also under the settlements:

A judgment for more than $17 million against Mahler and Debt Remedy Partners Inc. is suspended due to their inability to pay, except for $588,212. Mahler also is required to turn over a 1971 Hatteras yacht, a 2007 Cadillac DTC, and a Rolex watch to the court-appointed receiver for liquidation.

A judgment for $3.5 million against Lachs is suspended due to his inability to pay, except for $409,766.

Judgments for more than $18 million against Incandela and Gendason and more than $19 million against U.S. Mortgage Funding, Inc. and Lower My Debts.Com LLC are not suspended, but the two have plead guilty to unrelated criminal charges, and both face prison terms.

The FTC's Mortgage Assistance Relief Services Rule, known as the MARS Rule, bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeprincipal
s have a written offer from their lender or servicer that they decide is acceptable. Because the defendants' mortgage relief ads predated the MARS Rule, the FTC did not allege any violations of that rule in this case.


The FTC filed the four proposed settlement orders in the in the U.S. District Court for the Southern District of Florida. The settlement orders were entered by the court on February 3, 2012. The court entered default judgments against U.S. Mortgage Funding, Inc. and Lower My Debts.Com LLC on September 20, 2011.

NOTE: These consent decrees are for settlement purposes only and do not constitute an admission by the defendants that the law has been violated. Consent decrees have the force of law when approved and signed by the District Court judge.

For further assistance please contact The Federal Trade Commission's online Complaint Assistant at http://www.ftc.gov or call 877-382-4357.

The following describes a pending government action that has been formally brought by a government agency but has not yet been resolved. We are providing a summary of the government's allegations, which have not yet been proven.

As of March 7, 2011, the FTC has charged a Debt Remedy Partners, LLC, with marketing bogus loan modification services. The FTC seeks to stop the illegal practices and make the defendants pay refunds to consumers.

According to the FTC's complaint, the defendants target financially distressed consumers using direct mail, the Internet, and telemarketing, and falsely promise they will get loan modifications to make consumers' mortgages much more affordable, or fully refund their money if they fail. They make these promises even to homeprincipal
s whose lenders have denied them modifications or who have been sent foreclosure notices. The defendants charge up to $2,600 for their supposed services and typically ask for half of the fee up-front, claiming a success rate of up to 100 percent.

As alleged in the complaint, the defendants claim expertise that enables them to prevent foreclosure, and often mislead consumers to believe they are affiliated with, or approved by, consumers' lenders. They tell consumers not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments will demonstrate the consumers' hardship to lenders.

U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, David Mahler, Jamen Lachs, and John Incandela, Jr., also known as Jonathan Incandela, Jr., allegedly violated the FTC Act and the FTC's Telemarketing Sales Rule by falsely claiming they would obtain mortgage modifications that would make consumers' loan payments substantially more affordable. They also allegedly misrepresented affiliation with, or approval by, consumers' lenders, and falsely claimed they would fully refund consumers' money if they failed to deliver promised services. In addition, the defendants allegedly violated the Rule by calling numbers listed on the National Do Not Call Registry, and not paying the required annual fee for accessing numbers on the Registry.

The FTC recently issued the Mortgage Assistance Relief Services Rule, which bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeprincipal
s have a written offer from their lender or servicer that they decide is acceptable. Because the defendants' ads predated the Rule, the FTC did not allege any violations of the Rule in this case.

For further assistance contact the Federal Trade Commission Southeast Region at 404.656.1350 or visit their website http://ftc.gov/opa/2011/03/usmortgage.shtm.