The Federal Trade Commission, Consumer Financial Protection Bureau as well as attorneys general from fifteen states have started legal actions against more than 40 law firms and companies including the Utah based Danielson Law Group, FMC Counseling Services and California based Mortgage Relief Advocates that are alleged to have falsely promised distressed homeowners that they could lower their mortgage payments and interest rates as well as stop foreclosures.  In violation of the law these companies and law firms collected advance fees for services not yet performed and in most cases were never performed.  These fees ranged up to $6,000 for initial fees with additional monthly fees for which the consumers received little or nothing.


A telltale signs of a mortgage relief scams is the demand for an upfront fee before services are rendered.  The FTC’s Mortgage Relief Services Rule bans advance fees until you have actually received an offer of relief from your lender and you have accepted that offer.  Mortgage scammers also often tell you to stop paying your mortgage and not to communicate with your lender.  This is bad advice when you have a problem with your  mortgage.  Failing to make payments can make it worse and not communicating with your lender if you are having a problem paying your mortgage will only make the problem worse.  Finally, don’t trust any company that guarantees that they can get you a mortgage payment reduction and never transfer title to your home to anyone saying they are trying to help you.  That is another sure sign of a scam.

If you do find yourself having difficulty making your mortgage payment, either speak with your lender directly to see if you can get a modification or call a legitimate credit counselor through the Homeownership Preservation Foundation which is a non-profit company that provides free help to modify your mortgage and avoid foreclosure.  You can reach them at 1-888-995-HOPE.