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Federal Rule May Affect Foreclosure and Bankruptcy Properties Totals

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By : John Cutts    99 or more times read
Housing reports all around the U.S. have shown that fraudulent activities by some foreclosure rescue firms have contributed in some way to the increase in the number of foreclosed homes and bankruptcy properties in the country. Recently, the federal government has issued a regulation meant to protect homeowners from such companies.

Locally, several owners of Anderson foreclosure houses, IN and other distressed properties all around the state have reported being victimized by mortgage rescue businesses. The state has filed lawsuits against a number of this foreclosure rescue firms in 2010, claiming that they misled homeowners by promising to help them save their properties only to leave homeowners hanging.

With the latest Federal Trade Commission rule, owners of foreclosure homes in Indiana and in the rest of the U.S. are not required to pay a foreclosure rescue firm with advance fees until they receive a written confirmation from their lenders that a deal is on the table and not until the borrower accepts the deal offered.

According to housing analysts, some owners of foreclosed homes and bankruptcy properties that have been involved with rescue companies ended up losing their properties faster than if they did not secure the services of such firms. With the establishment of the rule that will take effect on January 31, 2011, analysts are hopeful that homeowners will have more protection from fraudulent foreclosure rescue operations.

The rule came as banks and other financial services institutions face lawsuits filed by attorney generals from various states and also from individual owners of foreclosure new houses across the U.S. Indiana's Legislature is scheduled to discuss the issue of mortgage rescue operations among other things come January 2011.

The new rule, according to housing analysts, can supplement the efforts of local legislators to help homeowners keep their properties. The regulation will also require rescue companies to declare their non-association with the federal government and let homeowners know that despite rescue firms' help; they can still lose their houses to foreclosure and get poor credit ratings.

Most owners of foreclosed residential properties and bankruptcy properties in Indiana have welcomed the news, asserting that it could provide protection from rescue companies that are only in the business to take money away from already troubled borrowers.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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