This weekend I saw my first loan modification infomercial. My first thought is are all those services scams? By that I mean, is the very notion of handing money over to a third party in hopes that they can do better than you in getting your debt paid, a losing proposition?
Meanwhile the FTC is suing a bunch of these services because their ads make them sound like they are sponsored by the federal government; Federal Loan Modification Law Center and Bailout.hud-gov.us.
The FTC is also sending out warning letters to 71 more services based on potentially deceptive ads which make the following types of claims; These advertisements contain potentially deceptive claims, touting guaranteed results, success rates of over 90 percent, and claiming affiliation with homeowners’ lenders, with the HOPE NOW Alliance, or with federal government programs.
Tags: FTC, Lawsuit, Linkedin, loan modification services
Reading Tea Leaves by Randy Wilson 
April 7, 2009 at 6:58 pm |
While I am pleased that this may act as a deterrent for the scam artists, I am amazed at the misplaced anger in the mortgage mess. Where were these guys during the subprime boom that created this situation? Not all loan modification operations are a scam. To paint everyone with a broad brush is clearly part of the corrupt bargain between lenders and the government. The banks don’t want to modify loans. The proof is in the pudding, how many lenders have signed up for the Obama loan modification plan? Zero, zilch, nada. That means none!
If you do not a have a freddie or fannie loan you are alone. reputable, proven loan modification companies will not go away…why? because people need help.
April 7, 2009 at 7:35 pm |
Thanks for the post. So how does the public know the difference between a legitimate loan modification service and one that isn’t? Does it matter how a company sells itself?
April 7, 2009 at 8:26 pm |
Are there alway “rotten” apples in the bunch… greedy… no different then the lending practices by many banks a very years ago. Be sure it’s an attorney based firm that specializes in this service. This is KEY!! I am in the business and helping homeowners the hard way.. they are advised that they can do it on their own.
April 7, 2009 at 8:29 pm |
There can be rotten attorneys too. So what as an attorney can you provide clients that a non-attorney can’t?
April 8, 2009 at 1:40 pm |
[…] sues another loan modification scam By Randy Wilson Earlier this week I posted about the FTC’s announcement that it was going after loan modification scams pretending to be […]