In an attempt to reduce scams and frauds, the Federal Trade Commission (FTC) is making stricter rules for companies and attorneys who help borrowers to get loan modification or other foreclosure-rescue services.
The new rule…
The highlights of the new FTC rule are as follows:
Fees: According to the new rule, mortgage-relief companies won’t be able to collect fees from consumers until they have a written offer from the lender and decide that the offer is acceptable to them.
Restrictions for attorneys: Henceforth, even attorneys won't be able to collect upfront fees from the consumers. Rather, the attorneys will have to create client trust account and place the advance fees in it. This will help the attorneys to keep their business finds and the clients' funds as separate.
Review advertisements and Websites: From now onwards, Federal investigators will pro-actively review advertisements and websites rather than waiting for consumer complaints.
Enforcement of the laws…
It will be the responsibility of the FTC and state attorney generals to enforce the federal rules by implementing various injunctions, civil penalties, etc. in order to recover money for consumers.