Prosecutors around the country filed 189 legal actions last month against loan modification consultants accused of cheating homeowners who are desperate to make their mortgage payments more affordable. The lawsuits and cease-and-desist orders were announced last month by Federal Trade Commission Chairman Jon Leibowitz and California Attorney General Jerry Brown. The actions are part of a nationwide sweep of alleged sham consultants by the federal agency and officials in 19 states. Commissioner Leibowitz used the announcement to put scam artists on notice and urged homeowners to protect themselves from being exploited. He said fraudulent loan modification consultants are “full of hollow promises designed to fatten the pockets of criminals and con men.”
The lawsuits, filed by the Federal Trade Commission and state Attorneys General, seek millions of dollars in civil penalties, restitution for victims and a permanent injunction to keep the Defendants from offering mortgage-relief services. The FTC is working on rules that would prohibit a mortgage modification service from accepting upfront payments. The Commission hopes to have the regulations in place by the end of this year.
Source: USA Today
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