Mortgage Modification, Foreclosure Rescue Firm Accused of DeceivingHomeowners.

A national mortgage modification and foreclosure rescue firm that operates under several names has been accused of making bogus claims to consumers.

The Federal Trade Commission named U.S. Mortgage Funding Inc., Debt Remedy Partners Inc., Lower My Debts.com LLC and the companies' officers in its complaint, saying they targeted homeowners behind in their mortgage payments or facing foreclosure.

The FTC seeks to stop the illegal practices and make the defendants pay refunds to consumers.

According to the FTC’s complaint, the defendants target financially distressed consumers using direct mail, the Internet, and telemarketing, and falsely promise they will get loan modifications to make consumers’ mortgages much more affordable, or fully refund their money if they fail.

They make these promises even to homeowners whose lenders have denied them modifications or who have been sent foreclosure notices. The defendants charge up to $2,600 for their supposed services and typically ask for half of the fee up-front, claiming a success rate of up to 100 percent.

As alleged in the complaint, the defendants claim expertise that enables them to prevent foreclosure, and often mislead consumers to believe they are affiliated with, or approved by, consumers’ lenders. They tell consumers not to contact their lenders and to stop making mortgage payments, claiming that falling behind on payments will demonstrate the consumers’ hardship to lenders.

The defendants allegedly violated the FTC Act and the FTC’s Telemarketing Sales Rule by falsely claiming they would obtain mortgage modifications that would make consumers’ loan payments substantially more affordable.

They also allegedly misrepresented affiliation with, or approval by, consumers’ lenders, and falsely claimed they would fully refund consumers’ money if they failed to deliver promised services. In addition, the defendants allegedly violated the Rule by calling numbers listed on the National Do Not Call Registry, and not paying the required annual fee for accessing numbers on the Registry.

The FTC recently issued the Mortgage Assistance Relief Services Rule, which bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable. Because the defendants’ ads predated the Rule, the FTC did not allege any violations of the Rule in this case.