With the national foreclosure rate persistently high, many homeowners have turned to loan modification or foreclosure “rescue” companies for help – only to realize they’ve been scammed. Anyone can become a victim of a loan modification scam. Learn from past victims, so you don’t have to be.
For more information on the Loan Modification Scam Alert Campaign, click here.
See below for Common Loan Modification Scams.
COMMON LOAN MODIFICATION SCAMS
Loan modifications are changing every day. Here are some of the most common loan modification scams out there today.
Phony Counseling or Foreclosure Rescue Scams
The scam artist poses as a counselor and tells you he can negotiate a deal with your lender to modify your loan or save your house—if you pay him a fee first. The fee may be called a processing fee or administrative fee. He may even tell you not to contact your lender, lawyer or housing counselor—that he’ll handle all details. He may even insist that you make all mortgage payments directly to him while he negotiates with the lender. Once you pay the fee, or a few mortgage payments, the scammer disappears with your money.
Fake “Government” Modification Programs
Some scammers may claim to be affiliated with, or approved by, the government, or they may ask you to pay high, up-front fees to “qualify” for government mortgage modification programs. The scammer’s company name and Website may sound like a real government agency, but the Website may end with .com or .net instead of .gov. You may also see terms like “federal,” “HAMP,” “MHA,” “HARP” or other words related to official U.S. government programs.
Contact your lender first. Your lender will be able to tell you if you qualify for any government programs to prevent foreclosure or modify your loans. And you do not have to pay to benefit from these programs.