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Feds, states crack down on foreclosure rescue and loan mod scams

Feds, states crack down on foreclosure rescue and loan mod scams

(Housing and Lending, Scams) Permanent link

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.

More info:

HUD news release
FTC news release
Washington Attorney General’s Office efforts

Posted by AGO Blog Moderator at 04/06/2009 05:18:51 PM | 


Is anyone familiar with a company called; [EDITED BY BLOG MODERATOR - NAME OF BUSINESS]? My brother I fear may have been suckered in to paying nearly $2500.00 to this company. [EDITED BY BLOG MODERATOR - NAME OF BUSINESS] is advising my brother NOT to speak to his mortgage company, and that they will speak to his mortgage company for him. Is this company legit, or just another scammer??
I look forward to your input.
Posted by: Teri Travis ( Email ) at 4/15/2009 6:34 PM


Any complaints on [EDITED BY BLOG MODERATOR - NAME OF TWO BUSINESSES] based in CAlifornia?
Posted by: Stephen Ring ( Email ) at 4/16/2009 9:21 AM


Stephen and Teri,

1) If the company is a law firm, as indicated, they should be licensed with your state bar.

2) The Washington State Department of Financial institutions requires that any provider offering loan modifications in our state be licensed as loan originators, mortgage brokers, or consumer loan companies. If you choose to go with a loan modification business, verify they have a license by checking the DFI Web site at www.dfi.wa.gov or by calling 1-877-RING-DFI.

3) You may file a public records request with our office to determine whether we have complaints. See process at http://www.atg.wa.gov/OpenGovernment/PublicRecords.aspx.

4) You might also want to check with the Better Business Bureau.

5) In Travis’ case, I suggest that he or his brother file a complaint with details. Click on “File a Complaint” from any page on our site.

Sincerely,
Kristin
Posted by: Kristin Alexander, Blog Moderator ( Email | Visit ) at 4/20/2009 10:18 AM


I have a company named [EDITED BY AGO BLOG MODERATOR - NAME OF "legal services" COMPANY], saying all you do is pay them $900.00 and they will basically force our mortgage company give a reduced interest rate on our mortgage. Is this a legitimate company? and can they do this?
Posted by: Coleen Joswick ( Email ) at 5/17/2009 1:55 PM


Hi Coleen,

Thanks for your post. The Attorney General’s Office is unable to confirm whether a business is legitimate unless we’ve done an investigation and determined a need to take enforcement action. As a policy, we don’t confirm which companies we are investigating. So I can’t comment on this specific business.

However, I would remind you that in most cases, it is is illegal to collect a fee in advance for such assistance. A number of businesses that claim to offer loan modifications are really looking to make a buck. Scammers ask homeowners for an upfront fee then provide services that the homeowner could have received for free through a nonprofit organization or from their lender. Sometimes, they provide no help at all.

Washington State Department of Financial institutions requires that any provider offering loan modifications be licensed as loan originators, mortgage brokers, or consumer loan companies. If you choose to go with a loan modification business, verify they have a license by checking the DFI Web site at www.dfi.wa.gov or by calling 1-877-RING-DFI.
Posted by: Kristin Alexander ( Email ) at 5/21/2009 4:40 PM


Why is it that these companies are able to get away with fraud. I was scammed by [EDITED BY BLOG MODERATOR - NAME OF BUSINESS] in Calabasas, Ca and until now I can't do anything about getting my money back or shutting them down. They continue to collect more money from desperate homeowners and are untouchable. All I can do is warn other people about this company. They also use this business name, [EDITED BY BLOG MODERATOR - NAME OF BUSINESS]
Posted by: Mike ( Email ) at 9/29/2009 9:50 PM


American Home Relief foundation LLC
Baltinore Md
offered to modify our mortgage..How do we make sure this is not a scam ?
Thank you

[AGO BLOG MODERATOR'S RESPONSE: Angelia, start by contacting your own lender. They may be able to offer you a loan modification. I’m assuming here that you are a resident of Washington State. If so, you may also be able to obtain free help through the Washington State Homeownership Information Hotline at 1-877-894-HOME.

The Washington State Department of Financial institutions requires that any provider offering loan modifications be licensed as a loan originator, mortgage broker or consumer loan company. If you choose to go with a loan modification business, verify they have a license by checking the DFI Web site at www.dfi.wa.gov or by calling 1-877-RING-DFI. You could also contact the Better Business Bureau and/or the Attorney General’s Office in Maryland to inquire about any complaints regarding that business. From the BBB Web site, it appears the business has "C" rating and has only been in business since February 2010.

Lastly, please be sure to check out our Web site at www.atg.wa.gov/foreclosure.aspx for resources and information about avoiding loan modification scams.]
Posted by: Angelia Brooks ( Email ) at 5/8/2010 7:11 PM


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