The ""Federal Trade Commission"":http://www.ftc.gov (FTC) has initiated rulemaking proceedings to address loan modifications and mortgage servicing.
The agency's ""Mortgage Assistance Relief Services"":http://www.ftc.gov/os/2009/05/R911003mortgageassistance.pdf rulemaking addresses the proliferation of loan modification and foreclosure rescue services in the current economy. The FTC says it wants to better protect financially distressed homeowners, and is currently seeking pubic comment on whether certain practices by foreclosure rescue and loan modification companies are unfair or deceptive, and should be reined in by standard regulations.
The agency says it has responded to the recent growth in the foreclosure rescue realm with a ""substantial and sustained commitment to bringing law enforcement actions against those who make deceptive claims about these services"" and target consumers in financial distress. The FTC says the public's input on these practices will allow it to better assess whether standard regulations are needed to further protect homeowners from abuses.
FTC Chairman Jon Leibowitz commented, ""Homeowners who are facing foreclosure or struggling to make mortgage payments shouldn’t have the added burden of being misled by unscrupulous businesses promising assistance that never comes.""
The commission said it is particularly interested in receiving comment on the costs and benefits of restricting the payment of advance fees for loan mods and foreclosure rescue services. The ""Mortgage Assistance Relief Services Advance Notice of Proposed Rulemaking"":http://www.ftc.gov/os/2009/05/R911003mortgageassistance.pdf has a 45-day public comment period ending Wednesday, July 15, 2009.
In addition, the FTC is seeking comment on a second proceeding, the ""Mortgage Acts and Practices"":http://www.ftc.gov/os/2009/05/R911004mortgageacts.pdf rulemaking, which addresses activities that occur throughout the life-cycle of a mortgage loan: advertising and marketing; origination, including underwriting, loan terms, and disclosures; appraisals; and servicing.
The FTC is particularly interested in receiving comments about mortgage servicing. The ""Mortgage Acts and Practices Advance Notice of Proposed Rulemaking"":http://www.ftc.gov/os/2009/05/R911004mortgageacts.pdf has a 60-day public comment period ending Thursday, July 30, 2009.
The FTC noted that any proposed rules would apply only to entities within the agency's jurisdiction, which excludes banks, thrifts, and federal credit unions, and said it would consult with the Federal Reserve Board and other federal banking agencies in developing the new rules.
Comments can be submitted through the Federal Register's Web site at ""Regulations.gov"":http://www.regulations.gov and should include either the reference ""Mortgage Assistance Relief Services Rulemaking, Rule No. R911003"" or the reference ""Mortgage Acts and Practices Rulemaking, Rule No. R911004"".