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06/09/10

FTC Broadens Mortgage Fraud Case to Include Forensic Audits


According to LoanSafe.org, the Federal Trade Commission (FTC) has added several defendants to a lawsuit against alleged loan scammers charged with deceiving homeowners seeking foreclosure rescue. In its new complaint, the FTC broadened its case to include defendants accused of offering the very misleading "forensic audit" scam to homeowners. John W. Smith and Glenn E. Gromann are now defendants along with other alleged scammers from the Debt Advocacy Center, LLC and CreditLawGroup.

The forensic loan audit is among the newest scams being perpetrated by operations seeking to advantage of vulnerable homeowners. Smith and Gromann promised to check the homeowner's loan documents for possible law violations which would in turn provide leverage to re-negotiate loan agreements with servicers. Using deceptive ads, they claimed "that between 80-90% of all loans that we have audited have some form of rights violations."

Smith and Gromann claimed the forensic audits they performed would guarantee loan modifications and lower mortgage payments. These false claims cost each homeowner a $995 upfront fee without the more affordable mortgage payments the scammers promised. This effort represents a nationwide crackdown on loan modification scammers by the federal government. The FTC has also created Forensic Mortgage Loan Audit Scams: A New Twist on Foreclosure Rescue Fraud, to inform consumers about legitimate resources to help save their homes.

For more information, please read "FTC Broadens Case Against Mortgage Relief Scheme; Charges That ‘Forensic Audits' Were Unlikely to Help Homeowners"