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FTC Nabs Companies Who Claim to Stop Foreclosures

April 08, 2012 | Comments: 0 | Views: 142

The Federal Trade Commission (FTC) recently facilitated charges against a company that preyed on homeowners who were behind on their mortgage payments and who were in fear of losing their homes to foreclosure.

The company was accused of untruthfully claiming their program could get late payments, late fees and legal fees waived. They also promised to reduce principal balances, convert adjustable mortgage rates to fixed at very low rates (1 percent) and to lower mortgage rates by as much as 40 percent. They led homeowners to believe they couldn't modify their mortgages without using the services being offered.

They promised quick results and claimed to have a high success rate. They charged mortgage holders an up-front fee of $1,495 and told consumers to stop making their mortgage payments based on their assurance that they would get the promised relief.

Their use of a logo that looked like the Great Seal of the United States led many to believe they were legitimate. As if all of this dishonesty isn't enough, they are also alleged to have disposed of client's personal financial information in unsecured dumpsters!

Additionally, the FTC made charges that they marketed debt relief services for credit card debt and made unrealistic promises to the credit card holders, such as the ability to remove late fees and reduce debts by as much as 50 percent.

The defendants in this case faced some serious charges including misrepresenting an affiliation with the federal government, improperly disposing of consumer information and making false claims regarding their ability to obtain loan modifications and lower payments.

Kudos to the FTC! As a result of these FTC complaints, these folks are out of business.

Beware of any company that:

- claims they will reduce mortgage payments as part of the "Obama Act" or the "federal stimulus program," even though they have no affiliation with the government.

- claims a very high success rate

- charges consumers high up-front fees for their promise to reduce mortgage payments and/or interest rates.

- contacts you with an offer stating you have been 'pre-selected because your loan meets their criteria.

- states what your new rates will be prior to obtaining your application for loan modification.

Don't let a 'satisfaction guarantee' promising a full refund if the company doesn't succeed in modifying your mortgage coax you into opening your wallet! One company recently made that promise and then disconnected their phones, changed their business name, and, of course, did not refund anyone a cent!

We'll keep you posted on mortgage foreclosure scams, identity theft schemes and many more activities of unscrupulous scammers at

Karla Woods is passionate about preventing people from becoming identity theft or scam victims. She does this by posting articles, blogging, and maintaining a website that helps educate people so they can't be fooled by unscrupulous people. Please visit her website, to learn about the latest scams and how you can protect yourself - before it's too late!

Source: EzineArticles
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Article Tags:

Mortgage Payments


Late Fees


Reduce Mortgage


Avoid Foreclosure


Debt Relief




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