REALTOR® Magazine-Daily News-FTC Is on the Attack Against Relief Scams

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Daily Real Estate News | November 22, 2010 | FTC Is on the Attack Against Relief Scams
The Federal Trade Commission last week announced new rules that prevent providers of mortgage foreclosure rescue and loan modification services from collecting fees until home owners have a written offer from their lenders that they decide is acceptable.

"Peddlers of so-called mortgage relief services have taken hundreds of millions of dollars from hundreds of thousands of home owners without ever delivering results," FTC chair Jon Leibowitz said. "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."

The new rules also require that companies disclose that:

· They are not associated with the government, and their services have not been approved by the government or the consumer's lender.

· The lender may not agree to change the consumer's loan.

· If companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating.

Source: Federal Trade Commission (11/19/2010)