FTC New Rule to Protect Struggling Homeowners from Mortgage Relief Scams

 

U.S. Federal Trade Commission has as part of its mission the protection of consumers from unlawful business practices. 

The FTC has issued its new rule (regulation) to protect distressed homeowners from mortgage relief scams.

This government agency recognized the need to protect struggling homeowners from loan modification and foreclosure rescue scams through its final Mortgage Assistance Relief Services (MARS) rule. 

We don't know yet whether this new regulation will actually help protect struggling homeowners.  

California state law and regulations on foreclosure rescue scammers have already been in place for about a year, which has chased some illegal businesses to close and get out of town.  But scammers seem to find a way to change location or morph their business so as to take advantage of consumers from another angle (like foreclosure rescue scams using web and telephone marketing through offshore offices at the Cayman Islands).

Some homeowners continue to struggle with making their monthly mortgage payments while at the same time foreclosure rescue and loan modification scammers are deceiving them into paying money upfront in exchange for little or no services. 

The FTC intended its new MARS regulation to protect struggling homeowners, prohibit foreclosure rescue and loan modification services (including lawyers) from deceptive practices, preventing them from collecting fees upfront unless the homeowner receives a written loan modification offer from the lender or servicer that they decide to accept. 

It's good that government is at least trying to control the illegal scams, and we hope this regulation works to help protect struggling homeowners. 

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Harrison K. Long - Business Solutions and Advisory - REALTOR® and broker associate, Coldwell Banker Residential Brokerage - Phone: 949-854-7747  -  CA DRE 01410855

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