INDIANAPOLIS (Indiana's NewsCenter) – The Federal Trade Commission announced a new set of rules Friday aimed at protecting homeowners from mortgage relief and foreclosure consultant scams.
Under the new rules, mortgage relief companies may only collect fees after a homeowner has received and accepted a written offer for a loan modification from their lender. The FTC’s new regulations, dubbed the Mortgage Assistance Relief Services (MARS) Rule, will protect distressed homeowners from mortgage relief scams sparked by the mortgage crisis. All provisions of MARS will take effect January 31, 2011.
Under the new FTC rules, mortgage relief companies will be prohibited from telling consumers to stop communicating with their lenders and making any false or misleading claims about their services. Mortgage relief companies will be required to make certain disclosures in their advertising including that they are not associated with the Federal government; 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.
It was also announced Friday that 16,736 Indiana residents will receive $10.87 as part of a settlement negotiated by 35 state attorneys general and the FTC with LifeLock, Inc. In March, LifeLock agreed to pay $11 million to the FTC and $1 million to the state attorneys general to resolve concerns that the company told consumers it could provide absolute protection from identity theft if they signed up for its identity protection service. Close to a million consumers nationwide who signed up for LifeLock’s services based on those false claims will receive a refund check.
LifeLock refund checks were mailed yesterday to eligible Indiana residents. Consumers who have questions can call the settlement administrator’s toll-free number at 1-888-288-0783 or go to www.ftc.gov/refunds.
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