Homeowners seeking relief from foreclosure proceedings must beware bogus mortgage loan modification operations.

During tough times you can safely bet that the con men are out in force. Especially now during the worse housing downturn since the Great Depression they are busy scamming homeowners who are desperate to find a way to avoid foreclosure on their homes.

“With many consumers desperate for relief and afraid they might lose their homes in these difficult economic times, some unscrupulous individuals prey on these fears for their own financial gain,” said FTC Chairman Jon Leibowitz. “The New Hope and Hope Now scammers have given consumers false hope under the guise of the government-endorsed HOPE NOW Alliance. We won’t hesitate to take action against these types of con artists now and in the future.”

This statement is from the Federal Trade Commission website:

“At the request of the Federal Trade Commission, a U.S. district court has ordered two companies to stop falsely advertising that they are part of a government-endorsed mortgage assistance network and that they successfully modify mortgages for almost all of their clients or else give refunds. In fact, the FTC alleges that the defendants are not affiliated with the legitimate HOPE NOW Alliance mortgage assistance network, often divert one month’s mortgage payment as a fee from distressed homeowners, fail to help them modify their mortgages, and then deny them refunds.”

According to the Federal Trade Commission, when consumers call advertised New Hope or Hope Now toll-free numbers, the defendants’ telemarketers promise them that they can help modify their mortgage loans and prevent foreclosure. Homeowner consumers are then told that in order to gain assistance they first must pay an up-front fee, referred to as a “mitigation escrow fee” before the defendants begin working with them.

The scam is really a blatant one as described by the desperate homeowners. In most instances, the defendants fail to obtain mortgage loan modifications, and in many instances consumers find out later from their lenders that they have not even been contacted by the defendants. Finally, the complaints state that consumers who complain about the lack of service often find they cannot get a refund for the substantial up-front fee they paid.

There are firms who can assist you with your loan modification needs and certainly they earn a fee when they perform as advertised. However, you must take the time to research any firm before you send them any money. Always be alert and beware that bogus mortgage loan modification operations are increasing as the economy gets worse. If you are a distressed homeowner your emotions can set you up to be easy prey for dishonest operators.

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