WASHINGTON -- The government's consumer-finance watchdog is in talks to settle charges that a California businessman falsely promised to help lower homeowners' monthly mortgage payments.
Abraham Michael Pessar said that he is talking to officials and is close to resolving the case, the first of its kind brought by the new Consumer Financial Protection Bureau.
The case, one of only two public enforcement actions by the agency so far, is seen as a bellwether of its approach to enforcing consumer laws.
Companies, lawyers, and advocates are dissecting it for hints about how tough the new regulator will be and what practices it will target.
The government in July accused Mr. Pessar and another businessman, Chance Gordon, of misleading homeowners about their chances of negotiating lower mortgage payments. It says the two charged illegal, up-front fees and did little to help clients who signed up.
Mr. Pessar and Mr. Gordon marketed their service to struggling homeowners with mailed flyers and phone marketing, the government said in its complaint.
Some of the flyers included the logos of government agencies and a Washington, mailbox address. It is illegal to imply falsely that a loan modification service is endorsed by the government.
Mr. Pessar declined to elaborate on his statement that he is close to settling the charges.
A lawyer for Mr. Gordon disputed the charges and said that Mr. Pessar was responsible for the customer contacts cited by the government.
The agency declined to comment because it does not confirm or discuss enforcement matters.