Today, the Federal Trade Commission ("FTC") published two advanced notices of proposed rulemaking seeking comments on governing mortgage acts and practices and mortgage assistance relief services. Both issuances were driven by a requirement in the Omnibus Appropriations Act of 2009 that required the FTC, within three months, to a rulemaking proceeding to address the unfair and deceptive mortgage practices. In commenting on the necessity of the rulemaking, FTC Chairman, Jon Leibowitz stated, "[homeowners who are facing foreclosure or struggling to make mortgage payments shouldn't have the added burden of being misled by unscrupulous businesses promising assistance that never comes."

The FTC "Mortgage Acts and Practices" rulemaking will address the activities that occur during the life cycle of a mortgage loan, which include advertising and marketing; origination; appraisals; and servicing. The advance notice recognizes that several mortgage lending disclosure and related requirements are covered by the Regulation Z and other existing laws and regulations but asks an extended series of questions about the nature of additional regulations. The FTC is specifically seeking comment in these areas with respect to mortgage servicers. Comments must be received by July 30, 2009.

The "Mortgage Assistance Relief Services" rulemaking addresses the increase in rescue services established in light of the current housing crisis. The FTC has responded to this growth by increasing its law enforcement actions against those who make "deceptive claims" about the services they offer. The FTC is specifically seeking comments on the cost and benefits of limiting advance payments for loan modifications and foreclosure rescue services. Comments must be received by July 15, 2009.