There are only a few are more frightening predicaments than losing your home, some shady mortgage assistance relief servicers know all too well. From false promises to scare tactics, these companies manage to bilk millions of dollars from consumers desperate to keep their homes. Unfortunately, their “services” leave consumers worse off than when they started.
The Federal Trade Commission has cracked down on six mortgage relief operations, alleging that these outfits preyed on distressed homeowners by falsely promising to lower their mortgage payments or help them prevent foreclosure. In each case, the FTC said it is seeking to “stop these illegal practices” and freeze their assets pending outcomes in court.
The FTC’s actions are part of a joint federal and state sweep, dubbed Operation Mis-Modification, with the Consumer Financial Protection Bureau, which brought charges against three other mortgage relief operations. Also involved in this sweep are 15 state attorneys general and other state agencies, which announced 32 similar actions.
“Mortgage relief schemes like these target people who are already having financial problems and, all too often, inflict even further harm on them,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “We’re determined to stop operations that illegally charge up-front mortgage relief fees or make empty mortgage relief promises.”
The FTC has charged the defendants in each operation with violating the FTC Act and the Mortgage Assistance Relief Services (MARS) Rule, now known as Regulation O. The Rule bans mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable.
Including the six cases announced, the FTC has brought 48 actions against companies peddling fraudulent mortgage relief schemes since 2008. “These companies pocketed illegal fees, taking millions of hard-earned dollars from distressed consumers, and then left those consumers worse off than they began,” Richard Cordray, the bureau’s director, told the Los Angeles Times. “These practices are not only illegal, they are reprehensible.”
According to the bureau, there are a few red flags to tip off potential victims. Consumers should be wary of any demands for upfront payments and any guarantee that a modification or other assistance will be obtained.
The Federal Trade Commission also filed six lawsuits, according to the Los Angeles Times. Overall, officials from 15 states—including Florida, Illinois and New York—have filed a combined 32 lawsuits.These law enforcement actions have helped tens of thousands of consumers who were victims of these scams, and have prevented tens of thousands more from becoming victims.
If you are in the market for a new house and would like information on homes for sale, or are first time home buyer not working with a Realtor and would like to schedule a consultation with a qualified Oakland County and Macomb County Realtor, please complete the Lang Premier Properties contact form to have a real estate agent contact you.