FTC Charges National Operation with Deceiving Distressed Homeowners

As part of its crackdown on mortgage scams targeting homeowners facing foreclosure, the ""Federal Trade Commission"":http://www.ftc.gov (FTC) has charged a national operation with marketing bogus loan modification services.
[IMAGE] The complaint alleges that U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC, and principals David Mahler, Jamen Lachs, and John Incandela, Jr. mislead consumers to believe they are affiliated with or approved by consumers' lenders. They tell consumers not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments will demonstrate the consumers' hardship and need for a mortgage modification.

[COLUMN_BREAK]

According to ""the FTC's complaint"":http://www.ftc.gov/os/caselist/1023146/index.shtm, the defendants target financially distressed consumers using direct mail, the Internet, and telemarketing, falsely promising loan modifications to make consumers' mortgages more affordable and to fully refund their money if they fail.

The defendants charge up to $2,600 for their services and typically ask for half of the fee up-front, claiming a success rate of 100 percent. The complaint was filed in the U.S. District Court for the Southern District of Florida.

According to a statement from the FTC, the defendants violated the FTC Act and the FTC's Telemarketing Sales Rule by falsely claiming they would obtain mortgage modifications that would make consumers' loan payments substantially more affordable. In addition, the defendants called numbers listed on the National Do Not Call Registry and did not pay the required annual fee for accessing numbers on the Registry.

The ""Mortgage Assistance Relief Services rule"":http://dsnews.comarticles/new-ftc-rule-aims-to-protect-homeowners-from-mortgage-relief-scams-2010-11-22, recently issued by the FTC, bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners receive a written offer from their lender or servicer that they decide is acceptable. Because the defendants' ads predated the rule, the FTC did not allege any violations of the rule in this case.