Friday, February 24, 2012

Court Shuts Down Alleged Loan Modification Racket; Consumer Losses Approach $19M: FTC

From the Federal Trade Commission:

  • At the request of the Federal Trade Commission, a U.S. district court put the mortgage relief business permanently off limits to marketers who allegedly charged thousands of consumers up to $2,600 each, based on bogus promises to provide loan modifications that would make mortgages much more affordable.

  • The case against U.S. Mortgage Funding, Inc. is part of the FTC’s continuing crackdown on scams that target homeowners who are behind in their mortgage payments or facing foreclosure. According to the agency, the scheme caused consumer losses of nearly $19 million. All but two of the defendants settled with the agency, while the two remaining corporate defendants received default judgments.

  • The FTC alleged that the defendants used direct mail, the Internet, and telemarketing to target homeowners – even those whose lenders had denied them modifications or who had been sent foreclosure notices. The defendants typically asked for half of the fee up-front, falsely claiming a success rate of up to 100 percent, according to the complaint.

For the FTC press release, see FTC Action Leads to Ban on Alleged Mortgage Relief Scammers Who Harmed Thousands of Consumers (Defendant Ordered to Surrender Yacht, Cadillac, and Rolex).

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