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It’s tough being a homeowner who needs mortgage help. There are a lot of
options out there for struggling homeowners who are likely to lose their
properties because they’re falling behind on their loan payments. But when
you search the Internet for ways to get started, it can sometimes be so
confusing, your feeling of helplessness grows even stronger.
Adding to
the confusion are con men peddling fraudulent mortgage-help services, and
causing even more trouble for struggling homeowners. Most debt management
companies are required to be licensed by the Minnesota Department of
Commerce. Therefore, before you hire a debt management company, check for
proper licensing and any enforcement action taken against it by calling
1-800-657-3602. Additionally, here’s what to watch out for:
Warning signs of loan
modification scams
A mortgage loan modification is recommended to homeowners that have a
financial hardship that is preventing them from making their monthly
mortgage payments. It’s sometimes tough to differentiate a fraudulent
service provider from a reputable attorney or non-profit assistance program.
The most effective way to make this determination is to keep your eyes open
for the following red flags:
-
Be leery
of anyone who guarantees that your loan will
definitely be
altered. Loan modifications are decided on a case-by-case basis, and there
are never any guarantees that yours will be decided in the positive.
-
It’s
illegal for a business or individual to collect upfront money for loan
modification services. If you question the scammer about the legality of
the fees, he may say the money is for something else. Don’t buy it. The
only service provider that can charge you upfront in this situation is a
licensed attorney who is representing you in a
bankruptcy
proceeding.
-
Don’t get
tricked into paying upfront by the promise of a money-back guarantee. The
only guarantee you’ll find is that the scammer’s phone number will be
disconnected before you realize that your mortgage isn’t being changed.
-
Some
organizations or individuals may try to win your trust by claiming that
they are affiliated with government agencies and programs, such as Obama’s
Making Home Affordable. The government has no affiliation with for-profit
loan modifiers that charge upfront fees.
-
The
scariest
red flag
is any proposal involving an ownership
transfer
of your home. These proposals might involve transferring the home to
someone with better credit, and then establishing a rent-to-own agreement
with you. No matter how logical this might sound, it’s a scam. If you fall
for it, you’ll end up losing your home anyway.
Warning
signs of foreclosure scams
The
possibility of losing your home to a foreclosure can be terrifying. Many
so-called foreclosure rescue companies or foreclosure assistance firms claim
they can help you save your home. Their goal is to make a quick profit
through fees or mortgage payments they collect from you, but do not pass on
to the lender. Watch out for these scams:
-
The scam
artist will tell you that he can negotiate a deal with your lender to save
your house if you pay a fee first. He’ll want to handle all the details
for you and once you pay the fee, he’ll be gone.
-
The scam
artist will insist you make all mortgage payments directly to him while he
negotiates with your lender. The scammer will collect a few months of
payments and then disappear.
-
The scam
artist will make you think you’re signing documents for a new loan to make
your existing mortgage current when, in fact, you are signing documents
that surrender your title to them.
-
The scam
artist will ask that you surrender your title in an effort to improve your
credit. When you try and buy it back later, it is impossible because the
terms are so burdensome. Worse yet, when the scam artist defaults on the
loan, you’re evicted.
-
The scam
artist offers to find a buyer for your home, but only if you sign over the
deed and move out. You are promised a portion of the proceeds but are left
with nothing, except for the responsibility of the unpaid mortgage.
-
The scam
artist promises to negotiate with your lender if you pay a fee up front.
Instead of contacting your lender, they pocket the fee and file a
bankruptcy case in your name without your knowledge.
You’ve
worked hard to stay in your home this long, and you don’t want to lose it.
Don’t let a fraudulent service provider worsen an already stressful
situation. If you are experiencing hardship, contact the LSS Financial
Counseling Service at 1-888-577-2227 or the National Foundation for Credit
Counseling at 1-800-388-2227. |
