Finance Globe
U.S. financial and economic topics from several finance writers.
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Government Halts Another Mortgage Relief Scam
Another so-called mortgage debt relief company preying on unsuspecting homeowners in two related scams has been halted by the federal government.
Putting a new twist on an old trick, the alleged scam operation lured homeowners into filing so-called “mass joinder” lawsuits against their lenders with false promises of debt forgiveness, halting and reversing foreclosure, credit restoration, and even compensatory and punitive damage awards, the Federal Trade Commission reported on Thursday.
Mortgage relief scams have been quite prevalent in the wake of the mortgage fallout, but this latest scheme was the FTC’s first case against alleged scammers who pitch these types of lawsuits against lenders.
The FTC said the operation consisted of five companies headed by Sameer Lakhany from Santa Ana, CA, including an alleged sham law firm, Precision Law Center. Lakhany also did business using three websites, HouseHoldRelief.org, FreeFedLoanMod.org, and MyHomeSupport.org.
According to the FTC, Precision Law Center sent out mass mailings that looked class action settlement notices. The mailings claimed that 80 to 85% of these “mass joinder” suits are a success and that homeowners may have their principal balance reduced to 70% of the current value, their interest rate cut in half, or even receive their homes free and clear.
After allegedly charging homeowners $6000 to $10,000 in advance to file the mass joinder suits, the suits were neglected by Precision Law or the suits were dismissed, leaving consumers in a worse position than they were to begin with.
The FTC said in a related scam, the defendants convinced homeowners that a so-called “forensic loan audit” would find lender violations 90% of the time or more, giving the homeowner leverage in forcing the mortgage lender to modify their loan and give them better mortgage terms.
The operation portrayed itself as non-profit, free, accredited, or certified HUD housing counselors and typically charged homeowners $795 to $1595 for the useless service, the FTC reported. Between both scams, the FTC said Lakhany and his companies allegedly took over $1 million from unsuspecting homeowners.
Consumers can avoid falling prey to a scam by keeping in mind that anybody can print off mailers or have a website. Also, always being on alert for red flags such as promises that no one else will make, advice to not consult your own attorney, limited time offers, and claims to have “special relationships” with banks or lenders. Use common sense and be a skeptic. Contact the Better Business Bureau or the FTC to see if the offer you're considering has been reported as a scam. And always remember the old saying that if it sounds too good to be true, it probably is.
Source:
Federal trade Commission
Putting a new twist on an old trick, the alleged scam operation lured homeowners into filing so-called “mass joinder” lawsuits against their lenders with false promises of debt forgiveness, halting and reversing foreclosure, credit restoration, and even compensatory and punitive damage awards, the Federal Trade Commission reported on Thursday.
Mortgage relief scams have been quite prevalent in the wake of the mortgage fallout, but this latest scheme was the FTC’s first case against alleged scammers who pitch these types of lawsuits against lenders.
The FTC said the operation consisted of five companies headed by Sameer Lakhany from Santa Ana, CA, including an alleged sham law firm, Precision Law Center. Lakhany also did business using three websites, HouseHoldRelief.org, FreeFedLoanMod.org, and MyHomeSupport.org.
According to the FTC, Precision Law Center sent out mass mailings that looked class action settlement notices. The mailings claimed that 80 to 85% of these “mass joinder” suits are a success and that homeowners may have their principal balance reduced to 70% of the current value, their interest rate cut in half, or even receive their homes free and clear.
After allegedly charging homeowners $6000 to $10,000 in advance to file the mass joinder suits, the suits were neglected by Precision Law or the suits were dismissed, leaving consumers in a worse position than they were to begin with.
The FTC said in a related scam, the defendants convinced homeowners that a so-called “forensic loan audit” would find lender violations 90% of the time or more, giving the homeowner leverage in forcing the mortgage lender to modify their loan and give them better mortgage terms.
The operation portrayed itself as non-profit, free, accredited, or certified HUD housing counselors and typically charged homeowners $795 to $1595 for the useless service, the FTC reported. Between both scams, the FTC said Lakhany and his companies allegedly took over $1 million from unsuspecting homeowners.
Consumers can avoid falling prey to a scam by keeping in mind that anybody can print off mailers or have a website. Also, always being on alert for red flags such as promises that no one else will make, advice to not consult your own attorney, limited time offers, and claims to have “special relationships” with banks or lenders. Use common sense and be a skeptic. Contact the Better Business Bureau or the FTC to see if the offer you're considering has been reported as a scam. And always remember the old saying that if it sounds too good to be true, it probably is.
Source:
Federal trade Commission
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