Federal Trade Commission cracks down on companies that pretend to offer mortgage relief
Laura Seitz, Deseret News
In hopes of deterring mortgage rescue scams, the Federal Trade Commission announced lawsuits against three companies that have allegedly deceived homeowners into giving them millions of dollars, according to CBS News.
"With many homeowners still struggling to hold onto their homes, the FTC takes a hard line against con artists who are seeking their next victim," said FTC Chairman Jon Leibowitz in a statement.
Under the “distressed homeowner initiative,” the FTC has sought 40 cases and says it has saved hundreds of millions of dollars since 2008. The agency also set up a new regulation where loan modification firms can’t collect fees until lenders submit written proof they’ll give the desired relief to homeowners, according to CBS News.
The FTC alleges the companies claimed to be able to negotiate mortgage rate reductions, advertised a fake affiliation with the government or urged clients to sever all communication with their creditors.
The defendants in the case have several aliases, including Prime Legal Plans, Consumer Legal Plans, American Mortgage Consulting, Home Guardian Management Solutions, Expense Management America and New Life Financial Solutions, according to CBS News.