This is a troubling story!  It comes out of Florida, but can easily happen to well-meaning, but distressed homeowners here in Chicago.

The come-on is oft repeated - on Cable and Broadcast TV.  On the Internet.  And in Urgent-Sounding Mailings.

The scam involves companies that promise to "Stop Your Foreclosure - GUARANTEED!"  But they will do so only AFTER you send them as much as $1,000 or more in up-front "Processing and Negotiating" fees!

Now, however, as syndicated reporter Kenneth R. Harney explains in his article in last Friday's Chicago Tribune, companies taking cash up front, and promise "Guaranteed Results," better perform as advertised.  If not, these companies will likely be charged with running a fraud!

Recently, the U.S. Federal Trade Commission filed a lawsuit against a Clearwater FL Mortgage Assistance Company - Mortgage Foreclosure Solutions, Inc.  They charged the company with running a scheme to offer and sell mortgage foreclosure services nationwide via half a dozen web sites.  But, in all but a few scattered cases, they never actually prevented foreclosures at all!

The company seemingly guaranteed miraculous results, no matter the size or tardiness of the mortgage, or the borrower's credit credentials and FICO Credit Score.  Copy "guaranteeing" their services appeared prominently in their ads.

Borrowers signing up were charged an up-front $1,200 for the service.  Yet, in virtually every case, the company failed to prevent foreclosure or save distressed borrowers' homes.  Those who did avoid foreclosure say they did so of their own initiative, without help from the company.

Earlier this month, the company settled in court.  The FTC obtained a judgment of $1.2 Million against th company, as well as agreement that they would no longer promise guaranteed foreclosure abatement.  Mortgage Foreclosure Solutions admitted no wrongdoing as part of the settlement.

In Harney's article, he quoted Cindy Liebes, Assistant Regional Director of the Federal Trade Commission.  She contends that Mortgage Rescue Companies typical have no special ability or priority to negotiate loan modifications or forbearance on behalf of distressed borrowers.  Unscrupulous firms prey on distressed homeowners when they are most frustrated, and most vulnerable, she continued.

She went on to warn homeowners having difficulty keeping up with their house payments to avoid companies using the following likely-fraudulent tactics -

1.  Guarantees to stop foreclosure, regardless of your financial situation.  No legitimate company, she says, would make such a guarantee.

2.  Charges an up-front fee before any assistance is undertaken.

3.  Advises borrowers to avoid direct contact with the lender.  (Most lenders, on the other hand, suggest that borrowers contact them directly to request forbearance or modification on their mortgage loans.

4.  Requires payment of mortgage to the rescue company's office, instead of the lender.

5.  Asks for title to the property in advance.

Most would assume that intelligent homeowners would never fall for such schemes.  Unbelievably, however - way too many have!

See our post today @ BlogChicagoHomes.com.

DEAN & DEAN'S TEAM CHICAGO