Finally, the federal government has recognized the prevalence of scammers victimizing homeowners who fear their houses will become foreclosed homes if they do not hire companies specializing in foreclosure prevention.
Large numbers of former owners of foreclosed homes have paid thousands of dollars in upfront fees to companies promising them mortgage loan modification and reduction of monthly payments.
Treasury Secretary Timothy Geithner pledged to find these predatory companies and shut down their operations. The Federal Trade Commission has mailed official warnings to 71 companies identified to have been running deceptive foreclosure prevention advertisements.
In March, the FTC filed lawsuits against New Hope Modifications LLC and Hope Now Modifications LLC. This week, it filed lawsuits against three more firms, namely Bailout.hud-gov.us, Federal Loan Modification Law Center LLP and Home Assure LLC, including the owners and executives of the firms.
Attorney General Eric Holder announced the FBI has been investigating more than 2,000 fraud cases related to mortgage loans and foreclosed homes, an overwhelming increase of 400 percent from mortgage fraud levels in 2004.
Holder also pledged to find and punish individuals and companies discriminating against and taking advantage of borrowers distressed by the possibility of their dwellings turning to foreclosed homes.
According to FTC officials, some of the signs of mortgage scams are the use of federal housing agency trademarks, the use of business names similar to government agency names and the provision of 99-percent guarantees against foreclosure.
State attorneys and housing officials have been advising homeowners to call and receive advice for free from HUD-approved counselors working in various nonprofits across the country.
They are advising distressed homeowners to stay away from loan modification companies that demand upfront fees before starting counseling. They reiterate that foreclosure prevention counseling is provided free by nonprofit counselors trained under HUD guidelines and that paid information provided by fraudulent counselors is freely available from the HUD website, the Making Home Affordable website and official websites of state housing agencies.
According to government investigators, some of the scammers are former real estate agents, brokers and appraisers who have lost their legitimate real estate businesses due to the housing market downturn and who have seen the opportunity to make money from foreclosed homes in a deceitful way.
While some state attorneys used state fraud statutes to file criminal cases against people and companies that have caused homeowners’ financial losses and worsened the situations of former owners of foreclosed homes, the other state attorneys have filed civil cases.
Author Resource:-
John Cutts has been educated in the finer points of the foreclosures market over 5 years. Read the latest foreclosure listings news at ListingsForeclosures.com.
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