The U.S. district court, at the request of the Federal Trade Commission, has ordered two loan modification companies to stop falsely advertising that they're affiliated with the foreclosure prevention alliance "Hope Now".

The two companies in question, "Hope Now Modifications" and "New Hope Modifications", have been charged by the FTC with violating federal law for claiming they could obtain loan modifications for customers in all or virtually all cases or refund payment if they could not.

The FTC alleges the pair often diverted one month's mortgage payment as a fee from at-risk homeowners, failed to help them obtain a modification, and denied any refund.

Seeking to capitalize on the "Hope Now" name, the defendants called their firms New Hope Modifications and Hope Now Modifications, and used telephone numbers that included "HOPE".

When consumers called the toll-free hotlines, they would be directed to pay an upfront fee, referred to as a "mitigation escrow fee," before work would begin.

Following the required "mitigation escrow fee" payment being made by the consumer, the defendants failed to return calls regarding the borrowers loan workout status, and in many cases, it turned out banks and mortgage lenders had never actually been contacted by the supposed loan modification companies.

The Chairman of the FTC Jon Leibowitz, stated "With many consumers desperate for relief and afraid they might lose their homes in these difficult economic times, some unscrupulous individuals prey on these fears for their own financial gain."

He went on to state: "The New Hope and Hope Now scammers have given consumers false hope under the guise of the government-endorsed HOPE NOW Alliance. We won't hesitate to take action against these types of con artists now and in the future."

I will note here that the actual HOPE NOW Alliance hotline number is: 1-888-995-HOPE, or 1-888-995-4673.