Some companies that purport to help property owners, including seniors who have chosen independent living after retirement, avoid foreclosure may do more harm than good, says the Federal Trade Commission.
The FTC announced that it is taking action against firms that deceive homeowners, including sending 71 warni
ng letters that they are considering legal recourse for companies that offer "guarantees" on services.
They are telling homeowners to be wary of any private company that requires up-front payments for services, or offers to take the title to one's home or act as an intermediary between creditors and mortgage holders.
Several companies which offer to help homeowners may instead take title to the home, or initiate bankruptcy proceedings, leaving seniors and others trying to keep their homes with increasing payments or even homeless.
The Department of Housing and Urban Development has approved counselors that offer mortgage help at no cost, federal authorities say.
The FTC is also working with several lenders to send information about mortgage modification directly to consumers, and says that those who are behind on payments should contact their lender first before considering other options.