As part of a crackdown on scammers preying on struggling homeowners, the Federal Trade Commission said Thursday that it nabbed a Florida company that lured people into paying up to $2,500 in upfront fees by falsely claiming it would save their homes from foreclosure.
The company, Home Assure, did little or nothing to help consumers avoid foreclosure and often refused to honor a "100 percent" money-back guarantee, the FTC said. The company typically charged an advance fee of $1,500 to $2,500.
"In numerous instances, the company refused to pay refunds, sometimes claiming that consumers did not meet the terms of the contract for a refund or that they had breached the contract by contacting their lender or filing for bankruptcy, and sometimes without giving a reason," the FTC said.
Some customers did receive refunds when they complained to their state attorney general, an FTC spokesman said.
The company "falsely claimed that its special relationships with lenders would enable it to get favorable loan modifications or stop foreclosure, and that the company had helped thousands of consumers avoid foreclosure," the Federal Trade Commission said.
Mortgage foreclosure rescue services have become a growing problem. Complaints about bogus offers to help people save their homes surged last year to become the fastest-growing type of consumer complaint, according to a survey of state and local consumer help agencies released this week.
As part of a settlement with the FTC, Home Assure will pay $2.4 million in refunds to victims. The company also was banned from the business of selling mortgage loan modification or foreclosure relief services.
Consumers due a refund will be notified by the FTC. People with questions may call the agency's response center toll-free at 1-877-382-4357.
Doug Oster writes a blog, "Growing With Doug," exclusively at PG+, a members-only web site of the Pittsburgh Post-Gazette. Our introduction to PG+ gives you all the details.