FTC Cracking Down On Mortgage Loan Modifiers

: Chris Lee Law Firm

  Filed under: Mortgage

mortgage modificationHomeowners under water on their mortgage have been scrambling to find the best financial relief option to help them stay out of foreclosure. A mortgage loan modification is one alternative that has provided many struggling homeowners with the help they need during tough times. However, as many have been fighting to stay out of bankruptcy and foreclosure; some mortgage loan modifiers have taken advantage of their desperate situation.

Predators Lending Practices

Problems have been surfacing in the mortgage loan modification industry causing more financial hardship for homeowners already working to maintain their finances. Some loan modification companies have been charging enormous up-front fees for services, over stating their ability to reduce the mortgage payments and failing to inform the lenders about the modification. These companies have been claiming a full money back guarantee, if the homeowner was unsuccessful in the program, and failing to follow through on the guarantee for homeowners. Even worse, some homeowners were never granted a refund of their deposits and found out their loan modification documents were fraudulent and, therefore, not valid.  Consumers haven’t taken the situation lightly and have stepped up complaints and solution efforts against such scrupulous lenders, and the FTC is taking note.

The Next  Level

The Federal Trade Commission has been increasing their efforts in regulating scrupulous mortgage loan modification practices.  Several companies have been shut down and ordered  to pay restitution to effected consumers. The FTC has banned these companies from marketing, joining other loan modification companies or providing any mortgage modification or foreclosure relief services.

In the past, the FTC has maintained strict regulations for such companies, but enforcing these regulations as been a problem. With the advancement technology, many of the non-reputable web-based companies are easier to police. As the FTC continues to improve their regulatory practices, consumers are encouraged to continue to report any violations.



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