With the rise of fraudulent loan modification schemes, if you’re a homeowner, you need to know how to spot a scam. Here are some red flags that might indicate you’re dealing with someone trying to scam you out of your money.
Ways to Spot a Loan Modification Scam
A company or person asks you to pay an up front fee in exchange for working with your lender to modify or refinances your mortgage. According to the Federal Trade Commission (FTC) Mortgage Assistance Relief Service (MARS) Rule, it is illegal for a company or individual to charge fees in advance for such services. It’s important to note here that attorneys are allowed to charge fees in advance, but only if they meet certain requirements according to the FTC MARS Rule Compliance Guide. Because of this, there has also been an increase in attorneys, and people posing as attorneys, taking advantage of homeowners.
No one can guarantee that they can stop your foreclosure of get your loan modified, so don’t fall for this! Scammers love to offer “money-back” guarantees, but they can’t guarantee anything. A trust-worthy HUD-approved agency will only promise you they will try their best to help you.
Don’t fall for a company or individual that tells you to pay them instead of pay your mortgage company. Always send your checks to the mortgage company. This is a perfect way for scammers to pocket the money for themselves, while you think they are handling everything for you.
Be wary of companies that pressure you to sign over the deed to your home, or sign any paperwork you don’t fully understand.
Contact your mortgage lender first before working with a company that claims it is “government-approved” or offers “official government” loan modifications. A HUD-approved counseling agency will also be able to determine what programs you are eligible for. Don’t not release any personal financial information over the phone or online.
Contact An Attorney
Knowing these scams will help protect you and your family from predatory loan modification scammers. If you have been a victim to one of these scams, contact an attorney today. They will be able to build a strong case for you. Chances are, you aren’t the only one that has been targeted by your specific loan modification scammer.