Stopping Foreclosure Scams: New FTC Rules Take Effect Today

HOCMN December 29, 2010

Beginning today, homeowners in Minnesota and nationwide are benefiting from the Federal Trade Commission (FTC)’s new consumer protection rules aimed at stopping foreclosure rescue scams. The Mortgage Assistance Relief Services Rule (MARS) bans companies from making false promises in their marketing and, beginning Jan. 31, prohibiting them from charging any up-front fees for their services. […]

Beginning today, homeowners in Minnesota and nationwide are benefiting from the Federal Trade Commission (FTC)’s new consumer protection rules aimed at stopping foreclosure rescue scams. The Mortgage Assistance Relief Services Rule (MARS) bans companies from making false promises in their marketing and, beginning Jan. 31, prohibiting them from charging any up-front fees for their services.

We are all well aware that these terrible scams are robbing homeowners of their savings, their home, or sometimes both. This new Rule will further our fight to end foreclosure rescue scams in Minnesota by giving the FTC the tools needed to crack down on scamming companies across the country – companies that are targeting homeowners in our state.

In addition, MARS requires mortgage modification companies to disclose key information to consumers, including:

  • They must explicitly state that they are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
  • The lender may not agree to change the consumer’s loan; and
  • If companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating as a result of this action.

For additional information about the new rules, and what it means for Minnesota homeowners, see our full press release, here.

While the new FTC Rule is an enormous consumer protection victory, homeowners still must be armed with information to recognize these scams and to protect their homes. That’s why the Minnesota Home Ownership Center has created a brochure-size, two-sided consumer education piece for you to share with your networks and consumers. It equips homeowners with simple questions to ask themselves when considering outside help for a mortgage modification, and it directs them to www.LookBeforeYouLeap.org to connect with a counselor in their community.

Order Look Before You Leap Consumer Handouts Today!

Help us help Minnesota homeowners – commit to displaying this piece today! The consumer handout is the perfect size for brochure and information racks, tabling events, or including in utility bills or other mailings. We have produced materials in both English and Spanish. And, we’ll provide you copies free of charge!  Visit the campaign website: www.LookBeforeYouLeap.org to download and submit an order form.

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