No debt relief for mortgages and student loans

If you feel in over your head with debt, a company’s promise to lower your mortgage or student loan payment might seem like a lifeline. Unfortunately, dishonest companies promising debt relief can make a bad situation worse.

Today the FTC announced it filed charges against Good EBusiness for debt relief schemes that targeted people struggling to pay off mortgages and student loans. People paid thousands of dollars in fees, the FTC alleges, only to find themselves out the money with no relief in sight.

According to the FTC’s complaint, telemarketers working under various company names, including Student Loan Help Direct, used a few different pitches to trick people into paying for empty promises.

Mortgage relief

For homeowners, the defendants promised to significantly lower people’s payments, reduce their mortgage interest rates, and prevent foreclosure proceedings. According to the FTC, the company told people to stop making mortgage payments, but pay the company instead. But once someone paid, they never got the promised modifications — or the refund the company had guaranteed. Many people fell further behind on mortgage payments, racked up penalties and late fees, and risked foreclosure.

The truth: it’s illegal for a business to ask you to pay for mortgage relief services until you’ve gotten an offer from the lender and accepted it. If you're having trouble paying your mortgage or have gotten a foreclosure notice, contact your lender immediately. You may be able to negotiate a new repayment schedule. Also consider other foreclosure prevention options, including reinstatement and forbearance.

Student loan debt relief

When it came to student loans, the company told people it could lower their monthly student loan payments, wipe out their student loan debt entirely, and remove wage garnishments. But according to the FTC, after people paid, none of that happened. In fact, the FTC says many people found out the company never even contacted their lenders.

The truth: you can apply for a new repayment plan for federal loans for free. If you have federal loans, debt relief companies can’t do anything for you that you can’t do yourself. Learn more at StudentAid.gov. For help with private loans, contact your loan servicer directly. And never pay an up-front fee for the promise of debt relief.

Tagged with: college, debt, loan, mortgage, student

Comments

I read your newsletters asap. Not just interesting reading, but informative abs always useful. Thanks.

Why isn't the FTC going after these hotel and resort fees? Just like the airline industry, these hotels are augmenting their published rates with fees that are purely profit.

THE FTC FOUND A WAY TO PUT STUDENT LOAN DEBT RELIEF BUSINESSES OUT OF BUSINESS. THEY DON'T WANT ANY THIRD PARTY HELPING THE CONSUMER. YES. MAYBE SOME ARE FRAUDS. BUT THERE A GOOD STUDENT LOAN DEBT RELIEF SERVICES THAT WILL ADVOCATE ON YOUR BEHALF. FTC IS HELPING DEBT COLLECTORS GET THAT STUDENT LOAN MONEY ANY WAY THEY CAN.

People who have federal loans can apply for a new repayment plan for free. You don't have to pay a debt relief company to submit an application for you -- you can do it yourself for free. Learn more at StudentAid.gov.

If you have private loans, contact your loan servicer directly. And never pay an up-front fee for the promise of debt relief

this has happened to me. It was dept relief Program that said if I paid them a monthly fee, they would pay my creditors off. the initial set up was $296.00 then 300 a month. The problem was the creditors were not in the program they kept calling back. But I have received no money back. the second was a Credir Repair program. they claimed they could help me repair my credit and get my scores up. first month they charged $120.00 with no results, the second month the same thing with no results. I tried to get my money back and they told me because of what they did for me I can't get any money back. The only thing I received was copies of all three credit reports. Please can you help me? Sheila P

You can report a problem with a business to your state Attorney General’s office.

This FTC article about choosing a credit counselor tells about choosing a credit counselor, debt management plans and other options for debt relief.

Thanks you very much. ...!!!

What about HARP loan

The Federal Housing Finance Agency has information about the HARP loan for homeowners.

Thank God for the Federal Trade Commission. This is what we really need. The criminals fear them, too, and I'm glad.

Thank you FTC for standing up for the people!

The problem was the creditors were not in the program they kept calling back. But I have received no money back. the second was a Credir Repair program. they claimed they could help me repair my credit and get my scores up. first month what they did for me I can't get any money back. The only thing I received was copies of all three credit reports. , the defendants promised to significantly lower and what did oh not do . Please can you help me

Before you get involved with a credit counselor or debt management plan, you could read this FTC article about choosing a credit counselor. It tells you things to look for if you are looking for a credit counselor and about debt management plans and other options for debt relief.

If you think a business has not done what it promised, you can tell your state Attorney General’s office and the FTC. File a complaint with the FTC at ftc.gov/complaint.

Thank you for information and examples Of the types of fraud that criminals use on vulnerable consumer's.

I've got equity but don't want to sell here in CA because where would I go? My loan is not freddie or Fannie but chase bought it through WAMU & say it is owned through invetors. Trying the modification since my income has dropped they say it's processing but dealing with foreclosures first, saying 'you have nothing to worry about you are not foreclosed" Well I soon will be since i have gone through most of my 401k. If I sell smaller places one story are in demand here in the san francisco bay area. Any suggestions appreciated. I have busy children here at least that way I have someone in the even I fall at home etc later on or who knows?

If you are struggling to make your mortgage payments,  contact your servicer. It’s critical to keep the lines of communication open when you’re trying to resolve issues with your account.

If you have trouble reaching or working with your servicer, call 1-888-995-HOPE for free personalized advice from housing counseling agencies. The housing counseling agencies are  certified by the U.S. Department of Housing and Urban Development (HUD).

This telephone hotline is operated by the Homeownership Preservation Foundation. You can get information online at  www.hopenow.com.

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