The Federal Trade Commission has settled with six defendants who charged distressed homeowners more than $4,000 a head to reduce mortgage payments via the “Obama Act.” The individuals were in no way associated with the government and were not offering a federally-approved or sponsored program and also did not have the affiliations with lenders and the government that they claimed was the source of their alleged 90-percent success rate. They promised payment reductions, principal reductions and interest rate reductions. Once clients paid the up-front fee, the group would change its contact information and disappear with the money. It appears that the group targeted specific individuals because their promotions were tailored to individual recipients.
Five of the six defendants have been ordered to pay back millions of dollars, while one defendant is still in litigation. All six have been banned from ever selling any type of mortgage modification or foreclosure prevention service again.
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