I wrote a recent column about an FTC action against companies that falsely promised to help consumers get relief from their student loan debt.
The FTC has also gotten a court to temporarily halt the operations of a company and related entities that deceived consumers with offers of mortgage relief assistance.
California-based National Amendment Assistance (also doing business as N.A.A.) mailed letters to homeowners nationwide claiming to offer mortgage relief under the CARES Act, which implemented a variety of programs to address issues related to the onset of the COVID-19 pandemic. Letters said homeowners could obtain a reduction in their mortgage rate and monthly payment through a special mortgage adjustment program connected to a “CARES-Act
Homeowner Assistance Fund or Lender Specific In-house Mortgage Adjustment Program.”
Consumers who paid upfront fees didn’t get any relief and some who were already struggling financially ended up in worse shape; some faced foreclosure or default. The FTC specifically alleged that National Amendment Assistance violated the law by deceptively:
- Promising mortgage loan modifications that will make consumers’ payments more affordable;
- Claiming their mortgage assistance relief services are associated with a federal government homeowner assistance plan;
- Instructing consumers that they do not have to or should not make monthly payments toward their mortgage;
- Collecting upfront payments before consumers executed a written agreement between the consumer and the loan holder or servicer.
National Amendment Assistance has an F rating with the BBB. One consumer filed a complaint saying “In September of 2023, this company and I agreed on a loan modification for my existing mortgage. They instructed me to not pay my mortgage for October and November of 2023 and that I would be in a grace period. They then charged me $1,950.00 for appraisal and processing fees. They never communicated with my existing mortgage company like they were supposed to, this put me 2 months behind on my mortgage and ruined my excellent credit that I carried for almost 20 years.”
This isn’t the first time the FTC has landed on a company it alleges is falsely promising mortgage relief and it won’t be the last. The FTC and BBB offer these tips to avoid becoming the victim of a mortgage relief scam:
- Don’t pay any money until the company delivers the results you want. It’s illegal for a company to charge you a penny until it’s given you a written offer for a loan modification or other relief from your lender — and you accept the offer.
The company must disclose key information to you. If you decide to accept your lender’s offer, the company must:
- Give you a document from your lender showing the changes to your loan;
- Clearly tell you the total fee the company will charge you for its services;
- Warn you that you could lose your home — and damage your credit — if you stop paying your mortgage.
The company’s ads and telemarketing pitches must clearly say:
- They’re not associated with the government, and their services haven’t been approved by the government or your lender;
- Your lender may not agree to change your loan.
The company can’t tell you to stop talking to your lender. You always have the right to contact your lender directly to see whether you have other options.
Randy Hutchinson is president and CEO of BBB of the Mid-South.
This article originally appeared on Memphis Commercial Appeal: BBB of the Mid-South: Beware of mortgage relief scams
