The Federal Trade Commission announced last week that it mailed claim forms out to Spanish-speaking consumers who fell victim to a housing scam that promised to prevent foreclosure or to obtain mortgage modifications.
The FTC sued several mortgage foreclosure “rescue” firms as part of the “distressed homeowner initiative,” a federal effort aimed at stopping predatory home rescue, short-sale and bankruptcy frauds and mortgage loan modifications that target struggling homeowners, CBS News reports.
Since 2008, the FTC has filed more than 40 suits under the initiative, saving consumers hundreds of millions of dollars in false charges.
In November 2010, the FTC, which is responsible for enforcing fraud and false advertising laws, won a judgment against Dinamica Financiera LLC, Soluciones Dinamicas Inc., Valentin Benitez and Jose Mario Esquer.
The commission alleged that the defendants violated the FTC Act by falsely asserting that they would provide the requested services in all or almost all instances. Under the judgment, the defendants are prohibited from selling mortgage foreclosure relief or mortgage loan modification services.
The FTC passed a rule in 2010 banning mortgage loan modification and foreclosure “rescue” operations from collecting fees until homeowners received written proof that their lenders were willing to provide relief.