The Loan Modification news site has a great article about the FTC and DOJ and explores if they are helping or in fact hurting homeowners.

There are countless stories about Obama's plan failing, and in case you have been living under a rock then let me update you. Obama's plan has failed miserably. Recently second-most powerful Democrat in the Senate called the Obama administration's mortgage modification program a "waste of time". Others are voicing their opinion at the banks for their un-willingness to help, and last but not least the FTC is going after the "pieces of shit companies" that actually might be helping these borrowers?

With banks like Bank of America only modifying up-to 7% of the loans eligible for the government's Making Home Affordable Program, what makes the FTC and attorneys think that these loan modification companies are actually scams?

To read the article click here

abcnews.com is reporting that Nations Housing Modification Center (NHMC), is currently under investigation and has been closed since the FTC raided their offices following a report on Good Morning America and World News.

"In our case against the so-called Nation's Housing Modification Center, the malefactors guaranteed to modify mortgages," Liebowitz said. "They required a minimum upfront fee of $2500 or 3000 or more but they failed to deliver on those promises. And they made the situation worse by actually telling the people who signed up for them not to make any more mortgage payments - that resulted in some consumers losing their homes."

"Just as disturbing," he continued, "this outfit bombarded homeowners with direct mail, making their companies look like the federal government's Making Home Affordable program. That program really does help distressed families in need and...they do it for free, not for a fee."

The move by the FTC comes as federal and state officials plan to expand a crackdown on loan modification scams to other schemes that prey on debt-ridden consumers.

From the article:

Working together, we can send a clear and straightforward message: If you perpetrate mortgage fraud . . . we will find you and we will charge you and we will put you in jail," U.S. Atty. Gen. Eric H. Holder Jr. said Thursday as top federal officials met with attorneys general from 12 states to coordinate those efforts.

Federal officials have been working with state attorneys general nationwide since April to ferret out fraudulent mortgage modification offers. In July, for example, California Atty. Gen. Jerry Brown filed suit against 21 people and 14 companies allegedly linked to loan modification and foreclosure-prevention scams, part of a nationwide sweep known as Operation Loan Lies.

At the end of July, the FBI had more than 2,600 pending mortgage fraud cases under investigation, many in conjunction with state officials after the creation of the multi-agency effort in the spring, Holder said. Now, federal officials want to expand that effort to other consumer debt scams, said Treasury Secretary Timothy F. Geithner.

A press release earlier today from the FTC shows that they are not in fact starting to sleep but still actively going after those who are accused of scamming home owners into illegally paying upfront fees for loan modification services which are never completed.

From the press release:

Infinity Group Services and its president are charged with violating the FTC Act by falsely representing that they would obtain a loan modification in all, or virtually all, instances; that they would give full refunds if they failed to do so; and that they would obtain loan refinancing for an up-front fee of $995.

According to the FTC's complaint, the defendants' radio ads and Web site urged consumers to call a toll-free number. Once consumers called, the defendants' sales personnel promised that, in return for the up-front fee, the company would help them modify their mortgage loans through the Department of Housing and Urban Development's Hope for Homeowners program. The defendants claimed a high success rate and offered a full refund if they failed. The FTC alleges that the company often failed to obtain loan modifications and either failed to answer or return consumers' telephone calls or update them about their status. When consumers were able to contact the defendants, they were falsely told that negotiations were proceeding smoothly or that lenders had caused a delay. In many instances, consumers received refunds only after repeatedly complaining to the FTC, the California Attorney General's Office, or the Better Business Bureau.

The FTC's complaint further alleged that the defendants also offered mortgage loan refinancing for a "flat fee" of $995 but then sought additional fees ranging from $2,000 to $15,000. In other instances, consumers were led to believe that they had closed on their loans but were later told by the defendants that the loan would not be funded. According to the complaint, the defendants' Web site stated that there were no hidden costs, but a fine-print footnote stated, "Rates, Fees and Terms are subject to change."

The press release also has an update on the Lucas Law Center Drama:

The FTC has obtained a stipulated federal court order barring Lucas Law Center and its principals from misrepresenting their services and charging up-front fees. The defendants allegedly used an attorney to circumvent California prohibitions against receiving a fee before providing any services. In addition to falsely representing that they would obtain mortgage loan modifications, the defendants allegedly told some homeowners to stop paying their mortgage in order to pay the defendants' fees of up to $3,995.

To read the full press release click here: http://www.ftc.gov/opa/2009/09/loanmods.shtm

The current mortgage and housing crisis has resulted in an increased demand for loan modifications.  To meet this demand, new loan modification companies and services are cropping up everywhere.  While some of these services and companies are legitimate and may be able to help you with your loan modification, others are not.  There are scam artists out there looking to take advantage of struggling homeowners who are in fear of losing their homes.  They offer big promises and guarantees but are only there to take your money.  Other companies may not be out to scam you, but they really don't have the sufficient experience to effectively help you.  So how do you tell if a loan modification company is legitimate or not?  Here are 4 tips to help you.

First you should check to see if the loan modification company has any association with any lenders or banks who offer loan modifications.  In particular, it will be helpful if the loan modification company has an association with your particular lender since they will be working on your behalf to help negotiate a loan modification for you.  If a loan modification does not have relationships or experience working with lenders then you should not work with them.

Next you need to research the company's experience and qualifications.  You will want to know if they have experience with loan modifications.  Ask for references.  Also find out what the employees educational and professional backgrounds are.  If the company cannot provide references or point to their experience and background with loan modifications, you should avoid them at all costs.

Third, the company you are considering working with should have a physical address and you should check to see whether or not the company has the proper licenses required in your state for loan modifications.

Fourth, look out for any company who is offering guarantees or big promises.  No legitimate loan modification service will offer you a guarantee that your loan modification request will be approved.  A loan modification will depend on whether you meet the lender's eligibility requirements and the final decision rests with your lender.  Also be very wary of companies who require large upfront payments.

There are some legitimate loan modification companies and services out there that may be able to help you, but you must do your upfront research to make sure they are legitimate.  Another option available to you is to spend that time learning about the loan modification process and dealing with your lender directly to request a loan modification.

"I think the banks are looking at the market bottom and trying to hold on to som eof their loans and properties until things get better," said Bill Newton, executive director of the Florida Consumer Action Network. "But it sure doesn't help the rest of us, especially since they're working with government bailout money."

The numbers from the first monthly Servicer Performance Report through July: 400,000 offers have been extended to 2.7 million borrowers who are more than two months behind in their payments. Of those, only 235,000 have started on the three-month trial period to begin a loan modification.

http://www.hispanicbusiness.com/news/2009/8/10/loan_modifications_not_happening.htm

from loan-deals.com news:

WASHINGTON - Today, the Obama Administration released its first monthly Servicer Performance Report detailing the progress to date of the Making Home Affordable (MHA) loan modification program.  The purpose of the report is to document the number of struggling homeowners already helped under the program, provide information on servicer performance and expand transparency around the initiative.

On February 18, the Obama Administration announced its comprehensive plan to stabilize the U.S. housing market.  Two weeks later on March 4, the Administration published detailed program guidelines and authorized servicers to begin modifications immediately.  MHA provides $75 billion for sustainable mortgage modifications through the Home Affordable Modification Program (HAMP). 

For more information please be sure to visit www.loan-deals.com.

Also for a do it yourself loan modification

Summary's of www.loan-deals.com

The Federal Loan Modification Law Center is the subject of a federal lawsuit in California filed by the Federal Trade Commission. In April, the FTC charged the firm with misrepresenting that, in exchange for an up-front fee, it would obtain a loan modification or stop foreclosure in virtually all cases. The FTC said the firm also misrepresented that it is affiliated with or endorsed by the U.S. government.

To read the full article click here

Green says 21st Century Legal Services contacted him, and offered a 30-year fixed rate loan at 4 percent. "My payment is $665, they said it would be $305, and I thought, ‘Yeah, that's what I need right now," Green told Newschannel 36.

To read the full article click here

In what is being called "Operation Loan Lies", the FTC has gone after some 173 companies in twenty-three states nationwide for loan modification scam's and fraud.