On May 25, 2016, attorney's for the FTC's Division of Financial Protection published an announced of the FTC's list of hundreds of companies and people that they put a sequel on their misleading operations.
In this post, we'll share insight about the Federal Trade Commission's publication and some tips for shopping for a mortgage relief or debt relief company.
What Does the Federal Trade Commission Do?
For those of you that don't know, the Federal Trade Commission, or FTC for short, is a federal organization that works to prevent fraudulent, deceptive and unfair business practices in the marketplace for consumers.
They also aim to connect consumers with resources and tips to help spot, stop, and avoid organizations that operate under these unethical business practices.
Over 500 Sued, Nearly 300 Banned!
There are many reasons why a company offering mortgage assistance relief services or debt relief services would be banned by the FTC.
Over the past several years since the collapse of the US housing market, the FTC has filed suit on over 500 companies and individuals - and nearly 300 of them have been banned from the industry. They have also achieved hundreds of millions of dollars in judgments.
What is a Mortgage Assistance Relief Service?
The Mortgage Assistance Relief Service Rule: A Compliance Guide for Business, a guide published by the Federal Trade Commission, is designed to help businesses understand the basics of the Federal Mortgage Assistance Relief Service Rule, MARS Rule for short, as defined under Regulation O. The guide, if used, can be a helpful tool for a business or person to offer this type of service and be compliant with the rule.
Now, there's more to the rule than what's in the guide, but it gives a great starting point. I have a few hundred of these guides in my office, which I hand out at any business presentation that I'm discussing the MARS rule. I feel is should be shared with anyone in or around any business or person helping homeowners find alternatives to foreclosure - and that's one division of Delmarva Home Relief that's available for consumers. If you'd like to learn more about how we may be able to help, contact us here.
The Rule defines "mortgage assistance relief service" as a service, plan, or program that is represented, expressly or by implication, to help homeowners prevent or postpone foreclosure or help them get other kinds of relief.
Examples of a mortgage relief service, plan, or program may include help with:
- loan modifications
- forbearance agreements
- short sales
- deeds-in-lieu of foreclosure
- extensions of time to cure defaults or reinstate loans
What is a Debt Relief Service?
Debt relief services are similar. It's any program or service – such as debt settlement or debt consolidation – that offers to renegotiate or change the terms of a consumer’s unsecured debt.
This may include services or programs for:
- Credit cards
- Student loan debt
They offer might offer services to help consumers:
- Reduce their balances
- Interest rate
- Fees owed
The Rules are Clear!
It's Illegal to Charge Upfront Fees!
The rules are clear about operating as a MARS Provider or Debt Relief company. Companies and/or individuals cannot collect a fee for their services until after they get the results they promised to get! Many of these operations misrepresent their services or mislead people into purchasing their services due to their misguided results for their customers.
Attorney's have a special exemption under the MARS Rule. If you take a few minutes to read through the FTC's List of Banned Mortgage Relief and Debt Relief Companies and People, you'll find several attorney's and law firms. Even though there are exemptions for attorney's, there are still several things you need to watch out for before hiring a lawyer. There's a compliance guide for attorney's on the FTC's website.
In the FTC's list, you'll also find companies that do not promote their company as a law firm, but maybe as a consulting firm, foundation, or corporation.
What you need to know about avoiding foreclosure, loan modifications, short sales, deed in lieu agreements?
There's no guarantee you'll get any type of workout option with your lender. It's extremely difficult to compare one situation to another without a detailed review.
If you're looking for tips on how to shop for a home loan modification company or other mortgage relief company or service provider, know this; You're either approved or denied based on government or in house loan modifications and other assistance options. Their may be laws to sue your lender, but for may, a Request for Mortgage Assistance may be the only option that may stop a foreclosure sale.
Another factor is your lender and loan servicers participation with government and in house programs. Your mortgage to income ratio and debt to income ratio play a large role in your qualifications, and there are many other factors to consider.
Remember, there is legitimate resources available if you need help getting through the process.
Learn Your Mortgage Assistance Options Today!
A compliant MARS provider negotiating on your behalf will do all the paperwork, negotiating, and communications that get results you accept before a fee is charged!
At Delmarva Home Relief, we guarantee to get you a loan modification, short sale, or deed in lieu of foreclosure agreement from your lender that you accept or our service is free! Guaranteed!
Contact Michael Nolen, Founder and CEO of Delmarva Home Relief anytime on his cell or office phone.
Download Michael's Free 10 Best Practices for Preparing a Loan Modification Package!
In Michael's free best practice guide, he shares guidance for preparing your package based on 10 common mistakes consumers make that has be known to slow down the process!
Sources and References
- FTC bans hundreds of mortgage assistance and debt relief operations, by Leah Frazier and Adam Wesolowski, Attorneys, Division of Financial Practices, FTC, May 25, 2016
- About us, FTC website
Delmarva Home Relief is not associated with the government, and our service is not approved by the government or your lender.
You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us [amount disclosed prior to service being perfromed] for our services.
Even if you accept this offer and use our service, your lender may not agree to change your loan.