Sunday, May 29, 2011 Cautions Homeowners of Advance Fee Mortgage Scam

Scam baits struggling homeowners with promises of mortgage payment relief, Better Business Bureau and the Federal Trade Commission are warning homeowners to keep their eyes open for solicitations, intended to swindle people struggling to meet their mortgage payments out of $5,000 or more in upfront payments. A recent article from WalletPop warns consumers of a new scam that targets struggling home owners. Consumers have reported receiving an official-looking letter from an out of state law firm, requesting that they pay a large fee up front in order to be included in a “mass joinder” lawsuit that promises to force mortgage lenders to drastically reduce monthly mortgage payments.  Consumers who receive this type of solicitation can be confident that they are being baited for the advance fee mortgage scam.

Recently, a handful of homeowners in Boone County, Missouri and Long Beach, California, received letters stating that their loans may be eligible for national litigation directed at fraudulent lender activities.  The letters received in Missouri did not provide a company name or return address.  Whereas the letter sent to Californian homeowners, marked “Personal and Confidential Legal Notice – Joinder Action Suit” were mailed from the Litigation Settlement Department, St. Peters, Missouri and included the names of the banks that held the home owner’s loan, as well as the loan amount and home details.
Complaints from homeowners range from receiving little or no mortgage help despite paying the upfront fee and failing to fulfill contracts for loan adjustments or foreclosure related services to misrepresentation of the firms’ ability to deliver services and failure to give refunds of advance fees.
The BBB uncovered more than 50 website addresses linked to these fraudulent companies.

The FTC has issued a statement prohibiting mortgage-relief firms from collecting upfront fees from consumers in hopes of eradicating fraudulent activity.  Consumer protection groups from California, Colorado, and Washington are stepping up their efforts to prevent these companies from preying on struggling homeowners desperate to avoid losing their homes, but warn that these companies have not given up and are adjusting their tactics and modifying their sales pitches to continue to bilk people out of money. urges consumers to check with the BBB and before signing on with any mortgage assistance company or “mass joinder” lawsuit. Search provides access to millions of records for a nominal fee for instant reports that can include phone numbers, date of birth, relatives, address, average home value, marriage/divorce records, criminal public records, civil judgments, bankruptcies, property public records, address history and more. Homeowners should be wary of any company that promises to modify a mortgage in exchange for an advance fee.  Before sending any money or signing a contract, check BBB Business Reviews at

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