3 Ways Scam Artists Can Endanger Homeowners
By Sarah Parr
Mortgage relief scammers are some of the best scam artists in the United States in modern times. They profit from distressed homeowners who are behind on their mortgage payments and give them a false sense of security. To find clients, scam artists may sort through foreclosure filings at courthouses and government buildings and target areas known as centers of foreclosure activity. They may advertise by door-to-door solicitation, flyers on telephone poles or roadside signs or traditional web, radio and television advertising.
Homeowners might not have the time to research what forms a loan modification scam, so here are a few of the techniques scammers use when tricking people who are on the verge of foreclosure.
Charge ridiculous fees
A mortgage relief organization may ask for a steep upfront fee for access to the latest government program or access to aid from a recent mortgage settlement. The truth is, a homeowner doesn’t have to pay a cent to speak with a Housing and Urban Development (HUD) licensed housing counselor or to qualify for specific homeowner rescue government programs. Contact information for free housing counseling and information about government programs and mortgage relief settlements can be easily found online. Homeowners should also be cautious of scam artists who want the homeowner to pay the monthly mortgage to them and not to the mortgage provider.
Establish false trust
Scam artists will do anything to present themselves as dependable professionals. Non-attorneys increasingly pretend they are attorneys who offer loan modification services. Some law firms even pose as non-profit groups that offer loan workouts or “forensic loan audits.” As part of a forensic loan audit, a so-called non-profit group may offer the assistance of an attorney or another expert to review mortgage documents to determine if the lender abided by the law. No evidence exists to show that these audits aid homeowners in getting any kind of mortgage relief. Consumers should question law firms that only list loan modifications as their services.
“Foreclosure rescuers” may also convince homeowners to transfer the title or sell his or her home to the company. The scam artist will convince them to stay in the home as renters and tell them they will be able to buy the home back later once they’re back on their feet financially. With the title in hand, the scam artist is able to evict the victims and claim the house.
Make shaky promises
Mortgage relief scam artists might promise a homeowner that a loan modification or foreclosure defense is guaranteed, especially if it’s handled by their company. A scam artist pretending to be a member of a legitimate organization approved by, or affiliated with, the government may also claim that a homeowner qualifies for a specific government program that aids in foreclosure defense or loan modifications. In reality, a quality foreclosure defense or loan modification is never certain, and access to certain government programs is only guaranteed for some borrowers.
Home owners who believe they might be the victim of a mortgage relief scam are urged to contact the Federal Trade Commission, their state Attorney General’s office or the Better Business Bureau.