The Federal Trade Commission has brought more than 90 cases since 2009 to stop deceptive practices such as falsely promised assistance with mortgage modifications, and there are likely to be more actions related to modification fraud ahead, FTC officials said in recent testimony.
“The FTC continues to target operations that falsely claim that, for an upfront fee, they will stop foreclosures or obtain mortgage modifications,” the commission said in written testimony officials prepared for delivery before the House Appropriations subcommittee Monday.
The commission noted in its report that it considers emblematic of these kinds of cases was “FTC v. First Universal Lending.” In this 2011 case, a federal court issued a stipulated order banning the defendants from the mortgage modification business and ordering them to pay nearly $19 million in redress.
“In this typical case, the FTC alleged that the defendants encouraged homeowners to stop making mortgage payments, telling them lenders would not negotiate unless they were at least a few months behind in their payments,” the FTC said. “After charging consumers up to $7,000 in up-front fees, the company often did little or nothing to help them.”
