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FTC Halts “Preferred” Mortgage Relief Scam

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Behind on your mortgage and looking for help? Check out these tips and learn how to avoid mortgage relief scams.

If you’re hiring a company to stop foreclosure or reduce your mortgage payments, here are some things to keep in mind:

  • Don’t pay an up-front fee. Unless they’re attorneys following specific rules, it’s illegal for companies to charge you until they’ve negotiated a loan modification and you’ve accepted it. So, don’t pay them until they fulfill their promise.
  • If a company claims attorneys will be helping you, check it out. Make sure they’re licensed to practice law in your state. Some companies falsely claim to be working with attorneys to get your business and charge fees in advance.
  • Beware of companies that tell you to stop contacting your lender. You should always feel free to contact your lender directly to see whether they can offer you additional options. Companies that tell you otherwise are breaking the law.
  • Find free, reliable mortgage assistance. To contact a free, HUD-approved housing counselor, visitthe U.S. Department of Housing and Urban Developmentor call HOPE NOW’s national 24/7 toll-free hotline, 888-995-HOPE. An independent, non-profit counselor can help you understand your situation, identify your options, and try to find an alternative to foreclosure.

The FTC just sued Preferred Law, PLLC, ten interrelated companies, and three individuals, alleging that they made false promises of mortgage assistance. Why? The FTC says the companies claimed a nearly perfect success rate, promised that their attorneys would prevent foreclosure and get loan modifications to reduce consumers’ mortgage payments, and misrepresented that they were affiliated with the government or customers’ lenders.

What really happened? According to the FTC, after customers paid fees, the companies usually did not get mortgage loan modifications. People lost money – and in some cases, their homes too. In response to the FTC’s complaint, the Court shut down the companies and froze their assets. The FTC has asked the Court to extend this relief until trial.

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For more information about avoiding mortgage relief scams, read our Mortgage Relief Scams article. If you’re the victim of a mortgage relief scam, report it to the FTC.

This article by the FTC was distributed by the Personal Finance Syndication Network.




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