The Federal Trade Commission (FTC) is cracking down on mortgage modification scams. Operation loan lies is a national law enforcement effort by the FTC and federal and state agencies to go after deceptive marketing practices made by modification companies that promise to help homeowners facing foreclosure.
Some of these companies employ abusive practices and made claims that they can help homeowners - collecting advance fees to do so - then are not able to follow thru on the claims. People facing foreclosure should avoid any company or individual that requires a fee in advance to stop a foreclosure or modify a loan, especially if the homeowner is advised to stop paying their mortgage payment.
According to a news release issued by the FTC, there are now four lawsuits, bringing to 14 the total number of mortgage foreclosure rescue and loan modification scam cases the Commission has brought since April. Twenty-three state attorneys general and other agencies are participating in the operation, taking action against 178 companies engaged in these types of deception. The FTC also announced a settlement in a lawsuit filed last November.
Some of these modification companies will:
· use attorneys to avoid regulatory restrictions on the collection of fees prior to providing services.
· claim to represent the loan servicer when in fact they do not, and
· target homeowners who are already late on mortgage payments.
The FTC has stated that they will step up enforcement actions against any entity that preys on homeowners in distress.
If you are having difficulty making your mortgage payment, the first call you should make is to your loan servicer. If you feel you are not getting resolution with your servicer and think you are in danger of facing foreclosure, you can call the Homeowner's HOPE(TM) hotline at 888-995-HOPE. At no cost, you can talk to a counselor who can help you assess your current situation and map out a solution. Homeowner's HOPE(TM) is a counseling service provided by the Homeownership Preservation Foundation, an independent nonprofit that provides counseling services through HUD-approved counselors.
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