Foreclosure “rescue” services will have to really put their money where their mouths are, thanks to new rulings by the Federal Trade Commission (FTC). Previously, it was simply a “red flag” to buyers if a rescue service required upfront payment, but now foreclosure rescue and loan modification services must wait to collect fees until the homeowner in question has an acceptable written offer in hand from their lender or servicer[1]. “By banning providers of these servicers from collecting fees until the customer is satisfied with the results, this rule will protect consumers from being victimized by these scams,” said FTC chairman Jon Leibowitz.
Companies must clearly state that they are not affiliated with the government, nor are they approved by the government or, necessarily, the consumer’s lender. Clearer explanations of the potential consequences of ceasing to pay a mortgage – credit damage and foreclosure – are also required. Furthermore, consumers must be allowed to stop doing business with the company in question at any time and can reject any offer and refuse to pay the company’s fees, even if a reduction or other modification is accomplished. If the change is not deemed “acceptable” by the consumer, then the consumer does not have to pay.
It should be noted that attorneys are “generally exempt” from these new rules.
Do you think that these changes are a good thing?
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[1]http://www.dsnews.com/articles/new-ftc-rule-aims-to-protect-homeowners-from-mortgage-relief-scams-2010-11-22
It could have been a good thing if they had included attorneys also. If you scratch the surface on these scams, most often you find an attorney or lawfirm just under the surface. So this really amounts to another nothing action by the FTC! After all they do not want to upset the people running them, now do they?
Absolutely not! It seems to me the government is in cahoots with the banks. And I do not belive the banks don’t want to own real estate, their actions say otherwise! I am beginning to wonder whether the banks and their lackeys in the government, want to turn us into a nation of tenants, like they do in Europe!
There are also some FINE loan modification negotiation companies out there, and I know SEVERAL attorneys that are being sued for mal practice due to their so-called loan modification business. Everytime the government acts, it gets worse!
The FTC should follow the State of California model wherein Real Estate Licensees, Unlicensed Individuals, and ATTORNEYS can not collect upfront fees.
What is the reasoning behind not applying these rules to attorneys> Must be that attorneys wrote the rul
Luis S
munozmelbourne@yahoo.com
It sounds like this is another scam thing put through by the banks and government to keep homeowners from getting help when they really need help. No legitimate businessman is going to do business when they are subject to the whim of a homeowner to nix the deal that has taken months to consummate. As a result, more and more homeowners will lose their homes because no bank is willingly helping homeowners get a good loan mod on their homes.
When corporations partner with government like we have now, it is called Fascism. Read all about it. That is the same form of government Adolph Hitler had. Those who don’t learn from history, repeat the course. National bondage or captivity is what occurs in that form of government. Our Congress (the opposite of progress) only represents corporations. All corporations must be represented by attorney’s.Everything starts to make sense when you know the rules of the game they are playing We actually own the whole loaf of bread, but we seem happy with just crumbs. Politician-Poli is latin for many, tics-blood suckers. The Constitution is found partially in the book of Exodus, you know Moses on Mt. Sinai. Remember ONLY THE TRUTH can set you free. It’s not about the left or right, it’s about right(truth)and wrong (Falsehoods) Secular and biblical history both bear out these truths. Aren’t most legislators attorney’s. Google the Wizard of Oz and read into the parable. Oz is the measurement of precious metals-gold and silver.Both in the federal and state constitutions call for all debts to be paid that way. Read the truth it’s stranger than fiction, and more exciting than falsehoods. Buy the way this is not religious it’s law. Who’s image are all over the Supreme Court building.
I think the biggest offenders are attorneys. I think that they should be held to highest standards and lead the way in loan modification reform. Otherwise they are ripping off homeowners under the pretense of the law. Attorney’s are the biggest offenders and should never collect money from the homeowner but from the lender since they are doing the work that the lender should be doing. This whole thing is a circus.
I would agree with the FTC’s new rules/ regulation on the rescue service’s. I also believe and would agree that included in these new rule regulations, the attorney’s should not get paid any money either until their customer/clients our satisfied . After all, we’re all aware of scandalous person’s who happen to be licensed or barred Attorney’s too.
Well this seems outrageous. How can anyone provide a service without payment or if the client is happy and satisfied…….stupid is as stupid does. Getting a loan modification is an act of pleading. Loan works outs are best done as a settlement. The amount of work involved to represent a client up against the lender is incredible. This stupid concept of not getting paid until lender accepts a deal for loan workout is not possible. Hence the end result is no representation for the homeowners and they are at the mercy of the lender. I have already successful litigated against big time lenders & trustees. Complicated law, but the only way to defend yourself. The leap of faith is tough for homeowner and full disclosure is necessary. To those that believe the attorneys are crooks and the loan modification people that take your payments but do absolutely nothing but punch in your credit card numbers there is truth of course of fraud. Some of them are as obvious as the Nigerian emails for bank account numbers. People need to be protected, but not by denial of legal help.
Because the attourney’s write the laws and they protect their own?
This hold new FTC ruling is going to make it worse for good mod companies, as soon as you adjust to new rules with your business plan, the more they move the goal post. I say let’s have a national clearing house based on having a minimum trackrecord of 1-2years in business, then if you past the “veting” process through your state, and local governments that your business practices are sound, then you get rated, and advertiesed by them as having the proper business ethics.
This basically puts all but the lawyers out of business in this area. My practice is to collect a partial payment up front just to cover the work to be done, but even that will have to change, since I no longer practice law or have an active license. By the time the bank makes an offer in writing, a great deal of usually has been done.
To Maurice: I agree that not all lawyers are honest, but they are monitored by the State Bar and the fees go into a seperate trust fund, not their back pocket. As to not colling until afterwards, I formerly practiced Bankruptcy law (and did loan modifications associated with them) and, too often, a client would prosmise to pay me the rest of the fee “later” and then disappear. Eventually, I stopped taking partil payments.
Why should attorneys be generally exempt from this rule. If it is to be affective all should abide by this rule. It’s like saying everyone must obey a speed limit but off duty law offices might be exempt.