Crackdown on Deceptive Mortgage Modification and Foreclosure Rescue Companies

As the government gets ready to rescue millions of Americans facing foreclosure, they have to take on mortgage modification scammers as well.

Early this month the Federal Trade Commission began a crack down on fraud and deception by certain mortgage modification and home foreclosure rescue companies. According to the FTC, these are companies that take customers' money, promise to help them out of foreclosure and then do little or nothing.

According to the FTC, some of the offenders included "Federal Loan Modification Law Center" or "FedMod", which markets mortgage loan modifications and foreclosure relief services. The FTC says FedMod charged consumers from $1,000 to $3,000 for their services, but failed in numerous instances to obtain the promised loan modifications.

The FTC alleges that a foreign internet registrar falsely registered two websites - bailout.hud-gov.us and bailout.dohgov.us. The sites were then used to entice financially strapped consumers into thinking they were associated with the U.S. government, including HUD and the Treasury Department. The FTC had both sites removed from the internet.

According to the FTC, "Home Assure" misled consumers facing home foreclosure that they could provide mortgage loan modification and foreclosure relief. But as the FTC reports, they regularly charged upfront fees of $1,500 to $2,500, then did little or nothing to actually help their customers avoid foreclosure.

And finally, the FTC says both "Hope Now Modifications LLC" and "New Hope Property LLC" misled consumers about their ability to provide mortgage loan modification and foreclosure.
The FTC also alleges they misrepresented that they were affiliated with the HOPE NOW Alliance, a non-profit, HUD-endorsed organization. The New Jersey Attorney General has also filed court actions against both companies.

So far the FTC has sent out 71 warnings to companies who may be deceptively marketing mortgage loan modification or foreclosure rescue programs. So are there any places where you can get help for free? YES!

WHERE TO GET HELP

First deal with your lender directly. Most lenders understand what's going on in the market and most, not all, would prefer that you stay in your house, rather then see it be foreclosed and vacant. So try to work something out with them first.

For free personalized advice from housing counseling agencies, call 1-888-995-HOPE.
Certified by the U.S. Department of Housing and Urban Development (HUD), this national hotline is open 24-hours, 7-days a week and is operated by the Homeownership Preservation Foundation, a non-profit member of the HOPE NOW Alliance or mortgage industry members and HUD-certified counseling agencies.

For free online help, go to www.hopenow.com and for free information on the President's plan for homeowners, go to www.makinghomeaffordable.gov

HOW TO SPOT MORTGAGE MODIFICATION AND FORECLOSURE RESCUE SCAMS

Watch out for too good to be true pitches and steer clear of anyone who offers an easy out.

Send payments directly to your mortgage servicer, some scammers offer to handle financial arrangements for you and then pocket your payment!

Some scammers use names and websites that look like they are part of the government. If you want to contact a government agency, type their web address directly into your browser and look up any address that you're unsure of. Don't click onto links or open any attachments in unexpected emails.

Finally, if you have been the victim of a mortgage modification program or company that did not help you, the FTC wants to know about it. File a complaint with them, they are monitoring these guys and going after the bad ones.