Watch out for mortgage foreclosure ‘rescue’ companies

The Federal Trade Commission has stopped another mortgage foreclosure "rescue" operation that allegedly promoted bogus loan modification and foreclosure relief services.

In February 2009, the FTC charged National Foreclosure Relief Inc. and three company officials with falsely claiming they would stop foreclosure or fully refund consumers’ money. In response, the court temporarily halted the defendants’ deceptive practices pending a trial, froze their assets, and appointed a receiver to take control of the business and its assets.

Many people paid the company up-front fees as high as $1,000, but still lost their homes to foreclosure, reports the FTC. Others avoided foreclosure only through their own efforts. After paying the fee, consumers who contacted the company were often either ignored or falsely told that negotiations with their lenders were under way, according to the FTC.

See "FTC Puts Mortgage ‘Rescue’ Company Out of Business" for details on the settle reached with National Foreclosure Relief and one of its directors.

Be wary of the "services" offered by mortgage relief companies. You could end up paying money for nothing.

The National Foreclosure Relief case is one of 17 lawsuits the FTC has filed in the past 11 months on mortgage relief frauds that target financially strapped homeowners. In addition, the agency is investigating more cases.

Copyright 2010, Rita R. Robison, Consumer Specialist