More Lawsuits Over Mortgage Relief Scams

: Chris Lee Law Firm

  Filed under: Financial News

mortgage relief scamThe Federal Trade Commission has had its hands full over the last several years working to bump up consumer protection and investigate thousands of mortgage relief fraud claims. After much attention came to light of foreclosure alternative scams and fraudulent lending practices, the FTC has been busy resolving the issues that have surfaced. As a result, numerous companies have been shut down and many lawsuits have been filed.

Taking Action

Since these problems have surfaced many steps have been taken to better protect consumers and stop scams.  A U.S. district court has placed a permanent ban on companies marketing services for mortgage relief when their sole objective is to charge outrageous upfront fees. Already on the list of “don’ts” companies can no longer charge upfront fees for services unless they offer a 100% money back guarantee, even then the FTC encourages consumers to be aware when dealing with such companies. Further, companies that market their services based on lavish promises and guarantees of loan modifications are also prohibited from making such bold claims.

The FTC has also recently completed a lawsuit that orders convicted mortgage relief companies to pay restitution to victims. Throughout the legal battle it was calculated that mortgage relief scams have cost consumers over $19 billion in losses in the past several years. The main defendants in the case were companies that used unsolicited direct mail and internet marketing as their tool for drawing in struggling consumers.  The court recently ruled that Mahler and Debt Remedy Partners Inc.  will be required to pay more than $17 million for their acts. Two other companies, Incandela and Gendason, will pay $18 million in restitution.

 


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