Feds Finalize Rules Regulating Upfront Fee Foreclosure Rescue 'Rackets'

The Federal Trade Commission recently announced:

• Homeowners will be protected by a new Federal Trade Commission rule that bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable. [...] The FTC is issuing the Mortgage Assistance Relief Services (MARS) Rule to protect distressed homeowners from mortgage relief scams that have sprung up during the mortgage crisis.

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• All provisions of the rule except the advance-fee ban will become effective December 29, 2010. The advance-fee ban provisions will become effective January 31, 2011.

For more, including the ban on advance fees, disclosure requirements, prohibited claims, and the exemption for attorneys, see FTC Issues Final Rule to Protect Struggling Homeowners from Mortgage Relief Scams (Rule Outlaws Advance Fees and False Claims, Requires Clear Disclosures).

Go here for the Text of the Federal Register Notice.