U.S. DOJ Targets Loan Modification Fraud

The U.S. Department of Justice issued a press release today announcing a new coordinated effort between federal and state government and private sector agencies to target mortgage broker loan modification fraud. The FTC has filed 5 new cases to halt illegal practices of real estate brokers and companies offering loan modification scams, including one company that spent $9 million on TV and radio ads over the last year. The FTC also sent 71 warning letters to operations using deceptive tactics. Apparently, many "loan modification companies" offer guaranties that are too good to be true. Others fail to ever contact the lender and never attempt to obtain a loan modification despite their customers providing full payment and all requested information. Such companies that take advantage of vulnerable home owners will finally be punished. Borrowers needing loan modification assistance should obviously avoid these companies, and instead contact an attorney. Free assistance is also available, such as via the Homeowner's Hope Hotline or the governments Making Home Affordable web site.