Stories of loan modification scams are all quite similar. These scams are often successful because is desperate times a homeowner will do anything they can to save their home and can be quick to listen to any plan that might help them do so.
How Loan Modification Scams are Created
Typically a person or group of people create a company with the intention of stealing money from unsuspecting consumers. Capitalizing on homeowners’ vulnerability allows for the creation of elaborate scams. These false companies make false promises to desperate homeowners in order to obtain a large upfront fee. The companies then pocket the money and do not perform the work they promised to.
How to Avoid Falling Prey to a Loan Modification Scam
The schemes described below provide a quick look at the most common type of frauds that homeowners encounter when seeking professional help for a loan modification.
Foreclosure Counseling Schemes involve collecting high fees in exchange for promises to modify a loan or delay foreclosure. In 2011 the FTC’s Mortgage Assistance Relief Services (MARS) Rule made it illegal to charge upfront fees for foreclosure assistance services.
In Forensic Loan Audit Scams so called mortgage professionals offer to review your mortgage documents in hopes to uncover any loopholes that may help to pursue a loan modification.
In a Playing as the Negotiator Scam a person or company alleges they have the special ability to negotiate with a lender and to make their payments for the homeowner.
A fraudster might convince you to Sign Over Your Property to them, convincing you, the homeowner, that they could aid you better if they had full control of the situation.
It may be difficult to know without doing research, but scam artists have been known to use False Representation and pose as legitimate organizations affiliated with the government or even your lender handling your mortgage.
You should also be wary of Licensed Lawyers Who Make False Promises and Defraud Homeowners. Many licensed professionals have been busted for operating large scale foreclosure and loan modification scams.
Becoming knowledgable about the various types of loan modification scams will help you be able to spot them before you and your family become victim to one.
For information and guidance on loan modification, you need the experts at Resnik Hayes Moradi LLP.