Beware Loan-mod Scams
Positive signs have recently emerged in the nation’s housing markets. As the Associated Press reports, compared to a year ago, foreclosures were down 2% in April, the first such decline in five years. Nevertheless, both unemployment and default rates remain high, and old problems persist. One such problem is the continuing issue of mortgage modification scams.
These scams prey on the vulnerability of families and individuals who are facing foreclosure and who are struggling to keep their homes. Foreclosure rescue scams come in many varieties. Often, scammers will make huge promises, like guaranteeing to stop a foreclosure, while charging considerable sums upfront for help that never materializes. Other scammers tell homeowners to stop making payments to their lenders and to pay a third-party instead. Still others will talk a homeowner into transferring over the deed or title to their home. Yet, the homeowner is, unknowingly, still responsible for paying off the mortgage. Scammers have also been known to file bankruptcy in the homeowner’s name, without the homeowner’s knowledge.
Free Help is Available
Thankfully, there are lots of resources available for distressed homeowners. To begin with, homeowners can protect themselves by taking action early and by calling their lender or mortgage servicer first. They can also call 1-888-995-HOPE (4673) to speak to a nonprofit, HUD-approved housing counselor for FREE.
For more information on mortgage modification scams:
- The US Treasury Department’s Office of the Comptroller of the Currency has put together a great guide on Mortgage Modification and Foreclosure Rescue Scams, here.
- NeighborWorks America has set up loanscamalert.org, which is devoted to informing homeowners about loan modification scams.
- Finally, the Obama Administration’s Making Home Affordable Program has a website and a very informative video: