By Sarah Parr
Loan
modification and foreclosure rescue scam artists know how to give homeowners
who are struggling to afford their mortgage payments a false sense of hope and
security. Scammers may take advantage of distressed homeowners’ hardship by
charging ridiculous amounts in fees, or even find ways to take ownership of the
home. Many companies with the intention of scamming a homeowner present
themselves as very professional and successful, and use traditional advertising
methods.
Loan
modification and foreclosure rescue scams come in many forms, and it may be hard to find the time
to research them all. Here are some ways to avoid a scam.
Seek help with legitimate sources
These days,
scam artists will try anything to appear as “official” as possible. A scam
artist may act as a member of a legitimate organization approved by, or
affiliated with, the government and claim that a homeowner qualifies for a
specific government program that aids in foreclosure defense or loan
modifications. Another common technique is non-attorneys posing as attorneys and offering loan modification
services. Law firms that only offer loan modification services and nothing else
should raise suspicion. Some law firms even pose as non-profit groups, or offer
phony loan workouts or forensic loan audits.
Question any upfront fees
Some shady
companies will charge for clients to qualify for specific government programs
meant to aid in the loan modification process or in foreclosure defense when
qualification is technically free. It also shouldn’t cost a cent to speak with
a Housing and Urban Development (HUD)-licensed housing counselor. An
organization asking for thousands of dollars upfront for access to the latest
government program or a recent mortgage settlement could be a sham. Homeowners
should also be wary of companies who may want the homeowner to pay the monthly
mortgage to them and not to the lender without notifying the lender first.
Free
foreclosure counseling is always provided by HUD-certified housing counseling
agencies, or by contacting the Homeowners’ HOPE Hotline.
Communicate with lender
Homeowners
who would like a loan modification or who are at risk of foreclosure should never
avoid any communication from the servicer of their loan. During the process of
a loan modification, proper communication with the lender should let a
homeowner know the status of his or her modification. There are numerous cases
of unethical organizations that never even speak with the lender while they
collect monthly fees from a distressed homeowner in the guise of aiding the
homeowner in obtaining a loan modification.
Loan
modification scam artists will do anything to convince their target that they
can definitely get the lender or servicer to modify a loan. The truth is, as Apopka foreclosure attorneys will tell you, defending against
foreclosure or obtaining a reasonable loan modification is never guaranteed,
and access to certain government programs is only guaranteed for some
borrowers. The lender or servicer should be able determine which programs will
work for a particular homeowner.
Homeowners should keep tabs on current scams
facing the housing industry
