The Obama administration today announced a new coordinated effort across federal and state agencies and the private sector to target mortgage loan modification fraud and foreclosure rescue scams. State attorneys general have been looking for a way to work more closely with the feds, so this is particularly good news.
The following VIPs held a press conference this morning: Federal Trade Commission Chairman Jon Leibowitz, Treasury Secretary Timothy Geithner, U.S. Attorney General Eric Holder, Department of Housing and Urban Development Secretary Shaun Donovan, and, on behalf of state enforcers, Illinois Attorney General Lisa Madigan. They encouraged consumers to seek out HUD-approved housing counselors for help with their mortgages. Here in Washington, homeowners can also receive free, state-sponsored counseling.
In addition, the FTC announced five new cases – including one involving a company that reportedly spent $9 million on TV and ads in a single year. The defendants are accused of taking thousands of dollars in fees upfront and doing little or nada to actually help people. Some allegedly misrepresented that they were connected with government agencies or the HOPE NOW Alliance.
Cases were brought against: Federal Loan Modification Law Center (FedMod), Bailout.hud-gov.us, Home Assure doing business as Expert Foreclosure, Now Modifications and New Hope Property doing business as New Hope Modifications.
The FTC sent warning letters to another 71 companies. Here's what Leibowitz says about the agency's work:
Washington AG Rob McKenna has been working on these problems, too. Our Consumer Protection Division has brought civil suits against several businesses and individuals that promised to help save homes from foreclosure (for a fee) but then failed to do so. We also introduced legislation to crack down on these schemes and have repeatedly warned the public. Most recently, the office has teamed up with AARP and others to sponsor a series of free “Taking Charge in Tough Times” seminars. Loan modification and foreclosure rescue scams are addressed as part of these workshops. There's still time to sign up.
HUD news release
FTC news release
Washington Attorney General’s Office efforts