|
Loan Modification Scams 2009 |
 Sept 2009 - FTC considering ban on upfront payments for loan help. The head of the Federal Trade Commission said the agency is considering banning upfront payments to companies that advertise help for borrowers who are in trouble on their home loans.
Government officials say scammers seeking to take advantage of borrowers in danger of default often charge upfront fees of $1,000 to $3,000 for help with loan modifications that rarely, if ever, pay off. If you are concerned about keeping your home, avoid any company that asks you for a large fee in advance. That is a real red flag. Such upfront fees are prohibited in 20 states.
The government has accused companies of charging homeowners large fees for assistance in working with their lenders, but doing "little or nothing" to actually help borrowers.
The FTC was also considering restrictions on how mortgage rescue companies can advertise their services. Ads for loan modification companies frequently appear on late-night TV and on billboards in some parts of the country. Nations Housing, for example, mailed homeowners official looking letters purporting to be from an address on Pennsylvania Avenue in the nation's capital. They were designed to trick consumers into thinking that they were participating in a government program, regulators said.
The government has filed charges against 22 companies operating such schemes and say the firms often have names or ads designed to make borrowers think they are using the Obama administration's efforts to help modify or refinance millions of mortgages.
Authorities emphasized that help is available for free from government approved housing counselors.
Homeowners can locate free housing counselors by calling 1-888-995-HOPE
|
