New Rules Imposed in an Effort to Eliminate Fraud during the Loan Modification Process

mortgage-300x195.jpgFraudsters often target those who find themselves in difficult financial situations. During the ongoing foreclosure crisis we have seen scammers take advantage of people by promising help with loan modifications. Now, the Federal Trade Commission is intervening to prevent the public from becoming victims in loan modification scams.

Loan modifications are currently a haven for fraud. If you feel as though you have been victimized by mortgage fraud, don’t despair. Our Miami mortgage fraud lawyers will carefully evaluate the facts and legal issues in your case. If we believe that you are a fraud victim, we are prepared to aggressively represent you in fighting for your rights and seeking justice in the legal system. If you are a victim of fraud, we will use our legal experience to stand up for your rights. We want to help you keep your home.

Loan modifications are currently a haven for fraud. Many fraudsters make every attempt to make themselves look completely legitimate. They will give themselves names that look like federal foreclosure intervention programs such as “Making Home Affordable” or “Home Affordable Modification”. Some scammers even go so far as to use photos of President Barack Obama or the seal of the United States in order to promote their scams.

However, effective January 1, 2011, the Federal Trade Commission (FTC) has adopted new rules to prevent homeowners from falling prey to loan modification scams. Under the new rules a loan mod agency cannot accept up-front payments. Further, they also must implement mandatory disclosure rules. For example, mod agencies will be required to make clear that they are not connected with a government agency or program. Also, they will have to disclose that you’re free to reject any offer from the lender without having to pay the agency a fee.

The FTC believes that fake modification agencies have stolen millions of dollars from homeowners who are severely delinquent or deeply underwater in the past two years. Sadly, as the federal government has broadened its efforts to establish legitimate foreclosure relief programs the amount of fraudulent schemes has risen. So far, the FTC has brought more than 30 cases against these operations. With these new rules, the FTC will have finally have a way to control the widespread advance-fee requirements.
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