Feds declare war on mortgage rescue scams
Demonstrating just how out of control these foreclosure rescue scams have gotten, the Obama administration paraded out an impressive collection of officials to declare war on the crooks. You don't often see that level of firepower (three cabinet members among them) taking on a scam.
This is among the worst type of scams that anyone can fall victim to. With the family home at stake, a potential victim is desperate, liable to believe anyone who appears legitimate enough to help make everything OK again.
Attorney General Eric Holder described those who perpetrate these scams as "despicable" and "immoral." The FBI, he said, is working on 2,100 mortgage fraud cases, up 400% from five years ago.
FTC Chairman Jon Leibowitz said of the scammers: These people are kicking people when they are down..."They are as shameless as they are opportunistic....If you pay them instead of your mortgage company, you will find yourself on the fast track to disaster." Sadly, the result for many who fall prey is they are out money they can't afford to lose and foreclosure proceedings have been allowed to progress to a point where they can't be stopped. The scammers are good at what they do. They create the illusion of legitimacy. Among those targeted by the FTC were some allegedly using names and logos that made them appear to be either part of the government or an established charity.
The Federal Trade Commission announced it was going after five companies that allegedly took people's money and did little or nothing to help them avoid foreclosure. Among them are:
- Federal Loan Modification Law Center (FedMod). The FTC alleges the company charges $1,000 to $3,000, misrepresenting that it is part of the federal government, and does little or nothing to help or even communicate with consumers.
- Bailout.hud-gov.us. The FTC says the owner used a foreign registrar to register that domain and bailout.dohgov.us. Both sites have been shut down by court order.
- Hope Now Modifications and New Hope Property doing business as New Hope Modifications. The FTC alleges this outfit deceived consumers into believing it was part of the HOPE NOW Alliance, a broad-based non-profit coalition endorsed by the U.S. Department of Housing and Urban Development.
"The last thing they need is to be taken advantage of when they're trying to protect their own homes," Treasury Secretary Timothy Geithner said.
Illinois Attorney General Lisa Madigan cautioned that any company that either makes a guarantee it can stop your foreclosure or demands upfront money is one to avoid.
"These program almost always are scams," she said. "Paying money upfront for mortgage rescue services is a clear sign of a ripoff and is illegal in most states."