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January 21st, 2009

FTC Targets Foreclosure-Rescue Scams

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Earlier this month, the Federal Trade Commission (FTC) filed a $1.2 million judgment against Mortgage Foreclosure Solutions, a company that promised consumers “for a $1,200 fee, they would stop foreclosure and save consumers’ homes:”

The FTC said the company lured homeowners with claims that “no matter how far you are behind in your payments, the size of your mortgage debt or your credit history, we have mortgage foreclosure solutions.”

Consumers who signed up were charged $1,200 — $250 for “processing setup” expenses, and $950 for negotiating with lenders and resolving foreclosure issues.

Yet the company, according to the FTC, did “not stop mortgage foreclosures or save consumers’ homes in all or virtually all instances.”

According to the FTC, “Foreclosure rescue firms use a variety of tactics to find homeowners in distress: Some sift through public foreclosure notices in newspapers and on the Internet or through public files at local government offices, and then send personalized letters to homeowners. Others take a broader approach through ads on the Internet, on television, or in the newspaper, posters on telephone poles, median strips and at bus stops, or flyers or business cards at your front door.”

Don’t believe the ads that guarantee to stop your foreclosure. Start by investigating the numerous legitimate avenues of foreclosure assistance offered by the Federal government and others. Be sure to visit HSH’s page “Foreclosure Scams and How To Avoid Them.”

For more from the FTC, click here to read their consumer alert “Deceptive Mortgage Ads: What They Say; What They Leave Out.”

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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