1/23/2009 FTC Press Release
FTC Launches Redress Program for Mortgage Loan Victims
Almost $28 Million Returned to 86,000 Consumers Harmed by Mortgage Servicing Practices
The Federal Trade Commission today announced that the agency returned almost $28 million to consumers this week as a result of a settlement with The Bear Stearns Companies, LLC and EMC Mortgage Corporation. Using the defendants’ records, about 86,000 consumers who had mortgage loans serviced by EMC have been mailed redress checks.
In September 2008, Bear Stearns and EMC agreed to pay $28 million to settle FTC charges that they engaged in unlawful practices in servicing consumers’ home mortgage loans. The companies allegedly misrepresented the amounts borrowers owed, charged unauthorized fees, such as late fees, property inspection fees, and loan modification fees, and engaged in unlawful and abusive collection practices. Consumers who have been mailed redress checks paid unauthorized fees to EMC and/or had a home foreclosed upon by EMC.
EMC consumers with questions should call the redress administrator at 1-877-225-7510.
Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.
(EMC FYI.2009.wpd)
Many lenders and servicers have been using unethical practices to avoid approving mortgage loan modifications for distressed homeowners. The EMC and Bear Stearns example in this post is just one of many stories of horrible occurences of abuse by lenders. More cases will surely be brought to court as more homeowners report being abused and deceived by banks as they apply for mortgage loan modification to avoid foreclosure. It is good to see that the courts are penalizing abusive banks and awarding damages to wronged homeowners.