Personal Finance and Money Management

It seems mortgage problems have been in the news nonstop recently but now consumers have yet another issue of concern. Mortgage scams are on the rise as people desperate to hold on to their homes become victims of unscrupulous scams. Sadly the end result is that homeowners often let slip through the fingers their homes even more quickly.

The U.S. Federal Trade Commission (FTC) has decided to crackdown on people and companies involved in scams that are targeting consumers in financial difficulty. In a typical scam, the operator will offer to help the consumer render impassable the foreclosure process. With mortgage companies continuing to be difficult to work with, numerous company consumers reach a point where any occur of help is accepted. The scammer will ask for a large fee or tells the homeowner to make their mortgage payment to the scammer instead of the mortgage body. The understanding is the scammer will convince the mortgage company to modify the mortgage loan or to stop foreclosure.

The new FTC program is called “Operation Stolen Hope”. This program will be a joint effort between federal and state governments. Already there are 140 actions in progress with 28 at the federal level and 112 brought by state attorneys. The actions filed against the scammers name violations of the FTC Act, the Telemarketing Sales Rule, and/or the Credit Repair Organizations Act. The actions request the courts to order the defendants to cease their deceptive practices and to force the defendants to incline differently over earnings from scams.

The Federal Trade Commission said in most of the cases the company would promise to work with the mortgage company to get a troubled loan modified. In most cases nothing was ever done. The defendants took advance fees and then tried to close union the mortgage company. In some instances the defendants would represent themselves as working with/for the federal government.

The new federal actions include court filings in equalization of Crossland Credit Consulting Corp., Crowder Law Group, The Debt Advocacy Center, Kirkland Young, Universal Lending, and Truman Foreclosure Assistance. The complaints vary and are very serious. There are FTC charges that fees were collected and pocketed instead of being used to pay off mortgages as indicated would happen. Some of the defendants sent postcards claiming their program is a federal program.

One defendant promised consumers a refund of an advance fee if the business was unable to obtain a loan modification. When consumers would ask for refunds, they were denied saying the fee was for advice and materials. In some cases bank accounts were debited without the homeowner’s permission.

In some of the worse situations, the defendant would instruct homeowners to stop paying their mortgage payments and to pay the defendant a large fee instead.

The six new actions filed by the FTC were not the first and will not be the continue. In the past the Federal Trade Commission has reached settlements with mortgage scammers. The terms of the settlements vary ranging from being barred from doing business to repaying fees collected when financially possible.

Any consumer that is contacted by a person or business he or she feels may be involved in a mortgage relief scam should not hesitate to report it to the Federal Trade Commission. It is the FTC’s job to make a decision if the mortgage relief services are legitimate.

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