Beware loan mod scammers using official-sounding names

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Those seeking loan modifications shouldn’t be taken in by official-sounding names, warn Fed and state officials. Some of these outfits are scam operations. From the Associated Press at latimes.com:

The frauds often involve companies with official-sounding names designed to make borrowers think they are using the Obama administration’s efforts to help modify or refinance 7 million to 9 million mortgages.

Officials say such operations almost always are fraudulent, and that help is available for free from government-approved housing counselors.

‘These predatory scams callously rob Americans of their savings and potentially their homes,’ Treasury Secretary Timothy Geithner said. ‘We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar.’

The Federal Trade Commission has sent warning letters to 71 companies it says were running suspicious advertisements. The agency also said it filed three new complaints against Northridge, Calif.-based Federal Loan Modification Law Center LLP, Newport Beach, Calif.-based Bailout.hud-gov.us, and Clearwater, Fla.-based Home Assure LLC, and the operators of those companies.

The FTC last month filed cases against two other companies: Hope Now Modifications LLC and New Hope Modifications LLC.

So if the offer sounds too good to be true -- coming with an unconditional guarantee of success, for example -- it probably is. Free help from Uncle Sam is available at http://www.makinghomeaffordable.gov/ or by calling (888) 995-HOPE.

-- Lauren Beale

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