On December 29, 2010, a new Federal Trade Commission rule went into effect related to Mortgage Assistance Relief Services (MARS). The rules target abusive practices by loan modification and foreclosure rescue companies.
This is good news for consumers. The rule “bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable.
Under this provision, mortgage relief companies may not collect any fees until they have provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer. The companies also must remind consumers of their right to reject the offer without any charge.”
While I am always wary of companies who offer to help consumers get a mortgage loan modification, at least this new rules helps identify potential scams if those companies ask for a fee up front.
As always, be careful out there.