FTC bans advance fees for mortgage relief

Consumers seeking to compare mortgage rates on refinance loans are receiving new money-saving benefits from the Federal Trade Commission.

Under the new regulations, the mortgage-relief business will be subject to the same rules as the debt settlement industry.

This means consumers looking to save money on their home loans can no longer be charged upfront fees on services. Companies must also disclose customers' delinquent payments that could cause foreclosure or damaged credit ratings.

"Homeowners facing foreclosure or struggling to make mortgage payments shouldn’t have to contend with fraudulent companies that don’t provide what they promise," said FTC Chairman Jon Leibowitz.

Mortgage-relief firms will also be barred from stopping communications between lenders and creditors, according to Bloomberg. The companies are now required to provide evidence of their effectiveness to consumers.

The regulations are meant to curve what the FTC has labeled a mortgage crisis. They are also part of a plan, put in place by President Barack Obama and Vice President Joe Biden, to help middle-class and low-income families that are burdened with debt and facing foreclosure.

Posted in: Loans, Mortgage, Refinance

Loans News: This article was published on 11-22-2010 at 2:36 pm.

View comments