It's a sign of troubled times. Con artists continue to prey on people struggling to save their homes.
In the latest examples, the Federal Trade Commission (FTC) has taken action against two families -- and their businesses -- that deceived homeowners in foreclosure rescovery schemes.
Specifically, the FTC:
• Charged a Florida couple who allegedly misled consumers into believing they could save their homes from foreclosurefor a hefty fee;
• Reached an agreement with four family members in Texas who allegedly misled consumers about their foreclosure recovery services.
In the Florida case, FTC officials charged Stephanie Dietschy, Darin Dietschy, and United Home Savers, LLC, for falsely claiming they could stop foreclosures in nearly all cases. The FTC also alleged the defendants promised to refund consumers' fees if they could not prevent that action, but failed to return the money.
According to the FTC, the defendants solicited homeowners by mail. Those who responded to the company's toll-free number heard a sales pitch about its foreclosure rescue services.
During that sales pitch, the defendants told homeowners they could negotiate a solution with the consumers' mortgage company. "And they often guarantee that consumers can avoid foreclosure," the FTC said in a statement issued Monday about its action.
The company charged consumers $1200 in advance -- a $900 mediation fee and a $300 administration fee.
"They also lead consumers to believe that, if foreclosure is not stopped and no solution is found, the $900 fee will be refunded," the FTC stated. "In most instances, however, the defendants do not stop the foreclosure and refund either nothing or only a portion of the $900."
A federal court issued a temporary restraining order against the defendants to stop their actions and freeze their assets.
The FTC on Monday also settled a case against four family members in Texas--and their companies--for allegedly misleading consumers about their foreclosure services. The settlement bars the defendants from future violations and requires them to refund more than $137,000 to consumers.
The defendants in this case are Elias H. Taylor and his companies, National Hometeam Solutions, LLC, National Financial Solutions, LLC, and Elant, LLC; Everard Taylor and his company, Evalan Services, LLC; Emanuel Taylor and his company, United Financial Solutions, LLC; and Edwin P. Taylor, Sr., and his company, Nationwide Foreclosure Services, LLC.
According to the FTC, the defendants promised homeowners they could stop foreclosures. Consumers, however, had to first pay up-front fees of $500 to $1,200.
But the defendants did not deliver the services promises -- and in some cases, made the situation worse for homeowners.
Specifically, the FTC alleged the defendants:
• Did not prevent foreclosure for their clients in several cases;
• Induced consumers to wait for weeks instead of contacting their lenders and exploring possible options to save their homes;
• Did not honor their promise to fully refund all fees if they could not stop foreclosure. That meant consumers sometimes lost fees and their homes.
Under the settlement, the defendants are barred from misrepresenting any product or service.
If they market any mortgage foreclosure rescue service, the defendants are specifically barred from misrepresenting:
• That foreclosure can or will be stopped, postponed, or prevented in all or virtually all instances;
• The likelihood that those outcomes can or will be achieved;
• The degree of past success of any such efforts;
• The terms of any refund or guarantee;
• The likelihood that a consumer will receive a full or partial refund if a foreclosure is not stopped, postponed, or prevented;
• Any ratings by the Better Business Bureau or other consumer advocacy or consumer protection association;
• Any fact material to a consumer's decision to purchase any mortgage foreclosure rescue service.
The FTC said the proposed settlement with National Financial Solutions does not constitute an admission of guilt by the defendants.
In the meantime, authorities say homeowners can avoid getting taken in foreclosure recovery schemes by:
• Not ignoring calls or letters from their mortgage companies. The first notices you receive should have information about foreclosure prevention options;
• Contacting your lenders as soon as you get behind on your payments. See if payment options can be arranged. Lenders do not want to see people lose their homes;
• Learning your rights about mortgages and foreclosure action. Your mortgage documents should outline what action your lender can take if you fail to make your payments. Also check out the foreclosure laws in your state every state is different. Your state's Government Housing Office should have that information;
• Contacting a HUD-approved housing counselor. Housing counselors can help you understand the law and your options when facing foreclosure. The U.S. Department of Housing and Urban Development (HUD) offers free or low cost housing counseling nationwide. To find a counselor in your area, call (800) 569-4287 or TTY (800) 877-8339;
• Avoiding foreclosure prevention companies. Housing experts say you don't need pay high fees for foreclosure prevention help. That money should be used to pay your mortgage. Some companies offer to negotiate your loan with your lender. But they charge a hefty fee in some cases, two or three month's of mortgage payments for services your lender or a HUD-approved housing counselor would provide for free.
• Watching out for foreclosure recovery scams. Be wary of any company that claims it can stop your foreclosure immediately. And never sign any documents that appoint someone else to act on your behalf without reading them first. You could unknowingly sign over the title to your property and becoming a renter in your own home.
Consumers who have complaints about foreclosure recovery companies can contact the FTC's at 1-877-FTC-HELP (1-877-382-4357).
The FTC enters complaints into Consumer Sentinel, a secure, online database that is available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad.
