- The Washington Times - Friday, February 5, 2010

FTC

Foreclosure rescue services under fire

The government is cracking down on companies that advertise help for troubled homeowners but often turn out to be scam artists.

The Federal Trade Commission said Thursday it would propose to ban those foreclosure rescue services from collecting payment upfront. Instead, they could only collect money if they were successful in providing help.

Government officials say unscrupulous companies often charge upfront fees as high as $3,000 for help with loan modifications that rarely pay off. The government says it has filed charges against 28 companies, which often imitate government housing assistance programs.

“Homeowners facing foreclosure or struggling to make mortgage payments shouldn’t have to contend with fraudulent companies that don’t provide what they promise,” FTC Chairman Jon Leibowitz said.

The new rules were required by legislation passed by Congress last year. Consumer advocates and government officials say borrowers are better off working with nonprofit credit counselors who work with lenders at no charge.

FAA

Safety initiatives lagging, IG says

A government watchdog says eight of 10 safety initiatives promised after a regional airline crash last year are behind schedule or are not meeting goals.

Transportation Department Inspector General Calvin Scovel also said stepped-up inspections of airline-pilot training initiated after the accident were not effectively put in place. He made the comments Thursday in prepared testimony to a House panel.

Federal Aviation Administration officials didn’t immediately respond to the criticism.

FAA issued a 200-page report last week touting its safety progress since the Feb. 12, 2009, crash of Continental Connection Flight 3407, which crashed into a house near Buffalo, N.Y., killing all 49 people aboard and one man in the house.

JUSTICE

Feds seek role in gay teen’s suit

MOHAWK, N.Y. | The Department of Justice is seeking to intervene in a gay harassment lawsuit against a New York school district that it says raises important civil rights issues.

Settlement talks continued Thursday in the federal civil rights lawsuit brought by a junior high student last summer against the Mohawk Central School District.

The suit claims officials failed to stop harassment by classmates of a male student who didn’t conform to gender stereotypes. The boy, now 15, is not named in the lawsuit.

Superintendent Joyce Caputo says the district denies allegations in the lawsuit. But she stresses that it is working with the New York Civil Liberties Union and the Justice Department to settle the suit.

COMMERCE

Factory orders up 1% in December

Orders to U.S. factories posted a big gain in December, far exceeding expectations and adding to evidence that the manufacturing sector is supporting the economic recovery.

The Commerce Department said Thursday that orders rose by 1 percent last month, double the 0.5 percent forecast by economists surveyed by Thomson Reuters. It was the eighth increase in the past nine months.

The advance was led by big gains in orders for metals such as steel and aluminum, as well as machinery. However, orders for transportation equipment, as well as computers and electronics, dipped slightly.

Economists are hoping the manufacturing sector is beginning to rebound as the economy struggles to emerge from the worst recession since the 1930s. The sector has become a pocket of strength, though some of it flows from temporary factors such as customers needing to add to depleted stockpiles.

SENATE

Measures aimed at pet-food safety

Three years after thousands of outraged pet owners complained that contaminated food was killing their cats and dogs, Congress is considering measures aimed at making sure it doesn’t happen again.

A Senate bill, the Food Safety Modernization Act, sponsored by Sen. Richard J. Durbin, Illinois Democrat, is intended to amend the Federal Food, Drug and Cosmetic Act. It is awaiting debate.

In the House, the Food Safety Enhancement Act of 2009, sponsored by Rep. John D. Dingell, Michigan Democrat, was passed last July. It would give the Food and Drug Administration more authority.

The tainted pet-food problem occurred in 2007 when Menu Foods Unlimited, one of the largest makers of cat and dog foods, was found to be selling melamine-contaminated food. Melamine is a synthetic chemical with a variety of industrial uses, including the production of resins and foams, cleaning products, fertilizers and pesticides. Ingested in sufficient amounts, melamine can result in kidney failure and death.

Approximately 18,000 consumers complained about the pet food, many saying that their cats and dogs grew seriously ill or died after eating Menu Foods products.

From wire dispatches and staff reports

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