According to its website, the Federal Loan Modification Law Center, LLP existed “to utilize [its] intimate knowledge of Federal and Consumer Homeowner Laws to help [its] clients in this housing crisis that is threatening the American Dream.” This company would contact borrowers across the country, including in Wisconsin, and offer them assistance with foreclosure alternatives like loan modifications and short sales.
It turns out that after collecting an up-front fee ranging from $1,500 to $2,500, the Federal Loan Modification Law Center would fail to provide borrowers any assistance.
In April, a federal district court in California enjoined the company from representing to people that it could offer foreclosure avoidance assistance. Now, the Wisconsin Department of Financial Institutions has prohibited the Federal Loan Modification Law Center from doing business in Wisconsin. Additionally, the company has been directed to refund all of the money it received from Wisconsin residents in exchange for its services.
Another California company known as 21st Century Legal Services failed to provide the modification help it promised to a Milwaukee couple – after collecting $3,500 from them. While no action has been taken by Wisconsin authorities, 21st Century Legal Services has been sued by attorneys general in at least three other states.
These episodes highlight a threat for which to remain on the lookout. As more people run into trouble paying their mortgages and face foreclosure, more companies are springing up to prey on those looking for help. The Federal Trade Commission has compiled a list of red flags that can help you avoid being victimized by a scam. You should avoid any business that:
Find out more about foreclosure rescue scams at the Federal Trade Commission’s website.