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FTC plans to ban upfront fees for loan modification

Shared by Sara on Mon Sep 21, 2009 3:05 am
In order to reduce mortgage related scams that victimize debt ridden consumers, Federal Trade Commission (FTC) is planning to ban the upfront fees for loan modification. Federal officials along with State Attorneys Generals are working since April to search for the fraudulent mortgage modification offers. Reducing mortgage payment is the only option left for the borrowers in order to avoid foreclosure. Scammers have tried to cash in this situation thereby asking large upfront payments from borrowers who applied for loan modification. If a law banning upfront fees is in vogue, then it would help authorities to shut down fraud companies asking for upfront loan modification fees. Source: http://www.latimes.com/business/la-fi-mortgage-scams18-2009sep18,0,700322.story

Community Members Opinion

savior70

Joined: 25 Mar 2009

Posts: 1895
Location: Florida

261.84 Dollars($)

Posted: Mon Sep 21, 2009 7:01 am Post subject:

It'd be wonderful, Sara, if such upfront fees are banned. Most of the fraudulent loan modification offers involve a high upfront fee. Innocent homeowners unaware of the trap and desperate to save their homes from foreclosure, often end up losing their money to these scamsters. With the number of defaults and foreclosures breaking all past records and with many more foreclosures standing in the queue, it will be a good move to ban the charging of upfront fees altogether. However, it's quite important for the people to be cautious as well. It's true they are stuck in bad situation and want to save their homes. But they should keep in mind that the upfront fees they pay for the modification programs do not guarantee any success. Thus, it's quite possible that they end up losing not just their homes but a lot of money as upfront fees. Whenever, any loan modification company demands an upfront fee, the homeowners must be cautious. In 99.99% cases, such modification programs are scams and should be avoided.

gmakerley

Joined: 09 Nov 2007

Community Mentor
Posts: 12346
Location: bloomfield, ct

53.01 Dollars($)

Posted: Mon Sep 21, 2009 9:15 am Post subject:

and i concur with you savior. many of us have been railing for months about these upfront fees being charged. so many of the "firms" involved are naught but scam artists in it for a quick buck. some of them legitimize their services in a way by tagging along with a lawyer; they justify their initial fees that way. i truly hope this plan goes into effect quickly. _________________ George M. Akerley Independent Contractor - Mortgage Consultant Word of Excellence Editing/Writing/Proofreading 860-221-5044

leeelliot61

Joined: 13 Sep 2009

Posts: 188

0.01 Dollars($)

Posted: Mon Sep 21, 2009 10:13 am Post subject:

yes it is a very good news & will give relief to those whose property evaluation has gone down in present market.


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