Guest Article by Sarah Parr
Protecting Homeowners from Mortgage Relief Scams
By Sarah Parr
The United States has some of the most deceiving businessmen today: mortgage relief scam artists. They exploit, profit from and give concerned homeowners who are behind on mortgage payments a false sense of security. Scam artists may look through newspapers or foreclosure filings at courthouses and government buildings and target clients from areas known as centers of foreclosure activity. Advertisement may come in the form of door-to-door solicitation, flyers on telephone poles or roadside signs or traditional web, radio and television advertising.
Mortgage relief scams are difficult to decipher, so here are a few tips to avoid encountering a scam.
Before reaching for your wallet…
Qualification of specific government programs that aid in the loan modification process or foreclosure defense is free, according to PreventLoanScams.org. It also doesn’t cost a cent to speak with a government agency-approved housing counselor. Nevertheless, homeowners frequently report shady companies that charge clients for access to government programs and housing counseling. If a homeowner rescue company asks for a large amount of money upfront for access to the latest government program or a recent mortgage settlement, it could be a sham. Information for housing counseling and government relief programs can be easily accessed online. Homeowners should also be cautious of companies that advise homeowners to pay mortgages to them and not to the loan provider.
Nothing is promised
Foreclosure protection or the modification of a loan is never promised, and access to specific government programs may only be guaranteed for some borrowers. Disappointingly, mortgage relief scam artists will try to persuade someone that a loan modification or foreclosure defense handled by their company is guaranteed. A scam artist may pretend to be a member of a legitimate organization approved by, or affiliated with, the government and state that a homeowner qualifies for a specific government program that aids in foreclosure defense or loan modifications.
In order to appear authentic and reliable, scam artists will do anything these days. Non-attorneys often pose as attorneys who only offer loan modification services, according to the New York Times. Consumers should be suspicious of these firms, especially since most law firms include loan modifications as one of many services. Some law firms even pose as non-profit groups that offer loan workouts or forensic loan audits.
Another kind of scam artist, the “foreclosure rescuer,” may convince a client to transfer the title or sell his or her home, and then tell the client to stay in the home as renters. They will reassure the former homeowners that they will be able to reclaim the house once they’ve recovered financially. However, the scam artist will be able to evict the victims and claim the home.
People on the verge of losing their home should watch out for the scams 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 government agency-certified housing counseling agencies, or by contacting the Homeowners’ HOPE Hotline.