“I can save your home” … or can I? Beware of loan modification fraud
Loan modification scams are prevalent but can be avoided by consumers. Learn about the common practices used by some to commit loan modification fraud.
It’s quite alarming when you experience difficulty paying your mortgage or are facing foreclosure. Unfortunately, these are two situations when consumers are most desperate for assistance and may become victims of fraud. Loan modification scams are plentiful, but most share common practices. One way consumers can protect themselves from becoming victims is through education.
Be leery of anyone who charges an upfront fee to help you modify your mortgage loan or avoid foreclosure. You don’t have to pay a fee to reap the benefits of any government programs that will provide assistance. No company can guarantee a successful conclusion to your mortgage issues. Avoid anyone who guarantees favorable results from a loan modification or the cessation of the foreclosure process. Some fraudulent companies may require that you make mortgage payments to them as they attempt to “resolve” the mortgage issues with your lender. Those payments will never be sent to the lender and you will never be credited with having made those payments. Make all payments to the lender, only.
A reputable company would never request that you sign your deed over to them as a condition of receiving help or pressure you to sign paperwork that you haven’t read or don’t understand. Look out for organizations that claim to offer loan modifications that are government approved. Any fraudulent organization can make that claim. Contact your mortgage lender or a Hud-approved counseling agency to see if you qualify for any government programs that will help you avoid foreclosure.
Above all, protect your personal financial information. Never disclose your private information to any entity that you don’t know or trust. Some companies may attempt to contact you via phone or email and begin to request information immediately. Any response to these companies could lead to identity theft.
You can help your community by reporting loan modification fraud. There are several options for reporting. Call the Homeowner’s Hope Hotline at 1-888-995-HOPE (4673) or Federal Trade Commission (FTC) at 877-FTC-HELP (1-877-382-4357). You can also file an online complaint through the Loan Scam Prevention Network or contact your State Attorney General or another local authority in your state.