BrokerageIndustry News

FTC bans advance fees for loan mod help

Regulators: Agents can be liable if they knowingly assist scammers

For-profit companies that provide "foreclosure rescue" and loan modification services will be barred from collecting fees in advance beginning Jan. 31 under new rules issued by the Federal Trade Commission.The FTC's Mortgage Assistance Relief Services (MARS) rule prohibits for-profit mortgage-relief companies from collecting fees for their services until homeowners have received a written offer from their lender or loan servicer that the borrower deems acceptable.The offer must be accompanied by a document from the lender or loan servicer describing the changes to the borrower's mortgage that would result if they accept the offer.The FTC has brought more than 30 cases against companies that have allegedly made false claims about their ability to negotiate loan modifications, short sales or other foreclosure relief -- if they provided any service at all.In some cases, mortgage relief companies have tried to make it appear they were affiliated with the government and government...