Home > Foreclosure alternatives > FTC To Protect Home Owners From Mortgage Scams

FTC To Protect Home Owners From Mortgage Scams

Beware of loan modification or foreclosure relief companies that ask for a fee in advance.

For some time on this and my other blogs, I have been warning home owners to stay away from mortgage relief or loan modification companies that ask for a fee in advance.

Now, according to an article on DSNews.com, the Federal Trade Commission has passed a new rule to address the same issue.

According to the FTC, the Mortgage Assistance Relief Services (MARS) rule was issued to protect distressed homeowners from mortgage relief scams that have proliferated during the mortgage crisis. The FTC warns that many of these operations pretend to be affiliated with the government and government housing assistance programs.

“At a time when many Americans are struggling to pay their mortgages, peddlers of so-called mortgage relief services have taken hundreds of millions of dollars from hundreds of thousands of homeowners without ever delivering results,” said FTC chairman Jon Leibowitz. “By banning providers of these services from collecting fees until the customer is satisfied with the results, this rule will protect consumers from being victimized by these scams.”

Under the advance fee provision, mortgage relief companies must also provide a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer. They must also remind consumers of their right to reject the offer without any charge.

I have long been an advocate of home owners doing their loan modifications on their own. Click here for a free self-help loan mod packet.

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