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Feds Crack Down on Foreclosure Rescue Companies

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By Admin on February 12, 2009 9:05 AM

Federal trade regulators are cracking down on shady companies that promise foreclosure rescue services to homeowners struggling to make mortgage payments and stay in their homes. The Federal Trade Commission (FTC) has filed two key lawsuits in the last month, action meant to help protect thousands of consumers from falling victim to foreclosure rescue scams.

In a press release issued Wednesday, the FTC announced that it has filed a lawsuit against National Foreclosure Relief, Inc. and its officers, charging the Nevada-based corporation with offering a  fraudulent "guaranteed Fresh Start Program" to homeowners who are in danger of foreclosure. According to the FTC complaint, the company charges between $300 and $1,000 for its services and then effectively takes no action to stop foreclosures or act on customers' behalf, instead failing to return phone calls and refusing to refund money even when customers end up losing their homes.

The Los Angeles Times reports that in January, the FTC filed a lawsuit against Florida-based Mortgage Foreclosure Solutions Inc.. The suit alleges that the company offered "foreclosure solutions" to financially-troubled homeowners -- charging as much as $1,200 per customer -- but never actually took any steps to act on behalf of its clients, many of whom ended up losing their homes despite having paid for Mortgage Foreclosure Solutions Inc.'s "guarantee of services."

Learn more about the FTC's latest action against these companies, and how to protect yourself and your home against foreclosure rescue scams: