3 Ways to Avoid Mortgage Relief Scams

3 Ways to Avoid Mortgage Relief Scams

By Sarah Parr

Mortgage relief scammers, some of the best scam artists in America, take advantage of distressed homeowners who are behind on their mortgage payments, and give them a false sense of optimism while also potentially draining their bank accounts. They browse through foreclosure filings to target clients and target areas known as centers of foreclosure activity. Like legitimate companies, unethical companies may advertise through forms of door-to-door solicitation, flyers on telephone poles or roadside signs or traditional web, radio and television advertising.

It may be hard to understand what a mortgage relief scam consists of, so here are a few of the ways companies can fool people who are worried about losing their homes.

Don’t fall for “guaranteed” results

The fact is, a foreclosure defense or loan modification is never promised, and access to certain government programs is only assured for some borrowers. Unfortunately, mortgage relief scam artists will try anything to convince someone that a loan modification or foreclosure defense is guaranteed. A scam artist may pose as a member of an official organization approved by, or affiliated with, the government and claim that a homeowner definitely qualifies for a specific government program that aids in foreclosure defense or loan modifications.

Question any upfront fee

It is free to qualify for specific government programs meant to aid in the loan modification process or foreclosure defense. It also doesn’t cost a cent to speak with a Housing and Urban Development (HUD) approved housing counselor. Nevertheless, shady companies have been caught charging for access to government programs and housing counseling. If a homeowner rescue company asks for thousands of dollars upfront for access to the latest government program or a recent mortgage settlement, it could be a sham. Government and housing counseling information can be easily obtained online. Homeowners should also be cautious of companies that urge the homeowner to pay the monthly mortgage to them and not to the loan provider.

Ensure company is legitimate

Scam artist will try anything to appear as genuine as possible these days. It is common for non-attorneys to act like they are attorneys and offer loan modification services. Consumers should be skeptical of law firms that only offer loan modification services and nothing else. Some law firms even pose as non-profit groups that offer loan workouts or forensic loan audits.

“Foreclosure rescuers” may also convince a client to transfer the title or sell his or her home, and will convince the client to stay in the home as renters. They will tell the former homeowners they will be able to buy the home back later once they’ve recovered financially. However, the scam artist now has the power to evict the victims and claim the home.

Homeowners who are at risk of losing their home should try to not fall for any of the schemes covered above. Also, homeowners who would like a loan modification or who are at risk of foreclosure should never avoid any communication from their lender. Free foreclosure counseling is provided by HUD-certified housing counseling agencies, or by contacting the Homeowners’ HOPE Hotline.

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