Mortgage Modification Scams
Mortgage modification scams and fraud is still rampant as some homeowners find themselves falling further behind on their mortgage payments and other debts. In desperation, some will be enticed into taking drastic action, and unfortunately, there are people and firms that will take advantage of the situation and the owner’s circumstances. As the old saying goes, “when it sounds too good to be true, it usually is!”
The following are some phrases and statements that owners should be on the lookout for:
1. “Why haven’t you replied to our offer? You will soon be living on the street?”
If someone continually contacts you and pressures you to work with them to stop foreclosure, don’t work with that person. Legitimate housing counselors do not conduct business that way.
2. “I will save your home – I guarantee it.”
Beware of guarantees that a person or company can stop foreclosure and allow you to remain in your home.
3. “We think it is best if you stop paying your mortgage.”
Don’t trust anyone who tells you to stop making payments to your lender.
4. “Just sign here and we’ll fill in the blanks later.”
Take the time to read and understand anything you sign. Never let anyone else fill out paperwork for you.
5. “If your mortgage company calls you, don’t talk to them.”
Your lender should be your first point of contact for negotiating a repayment plan, modification, or short sale. It is vital to stay in close communication with your lender so they understand your circumstances.
6. “Call 1-800-Fed-Loan.”
This may be a scam. Some companies trick borrowers into believing that they are affiliated with or are approved by the government to tell you that you must pay them high fees to qualify for government loan modification programs. Keep in mind that you don’t have to pay to participate in legitimate government programs.
7. “Pay us $1,500 and we can save your home.”
Be wary of companies that require you to provide a cashier’s check or wire transfer before they take any action on your behalf.
8. “Your mortgage company never had the authority to make that loan.”
Don’t listen to anyone who claims that “secret laws” or “secret information” will be used to eliminate your debt and have your mortgage contract declared invalid. These scammers use sham legal arguments to claim that you are not obligated to pay your mortgage. These arguments don’t work.
9. “We have ways for you to file for bankruptcy and keep your home.”
Filing bankruptcy only temporarily stops foreclosure. If your mortgage payments are not made, the bankruptcy court will eventually allow your lender to foreclose on your home. Beware that some scammers will file bankruptcy in your name, without your knowledge, to temporarily stop foreclosure and make it seem as though they have negotiated a new payment agreement with your lender.
10. “Just sign over your home, and we’ll let you stay in it.”
Be very suspicious if someone offers to pay your mortgage and rent your home back to you in exchange for transferring the title to your home.
The mortgage meltdown, collapse in housing prices and high unemployment rates have created a very unfortunate situation for a lot of people. It is times like these and situations like this where scam artists will take advantage of people’s troubles. Just don’t be one of them. We have a section on our website for Debt and Mortgage Scam information that can help you find legitimate sources of help.
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