Foreclosure Rescue and Loan Modification Scammers are Preying on Stressed Homeowners.
 

How to protect yourself from foreclosure frauds, easy money schemes, and other costly deals.

   Many homeowners are having difficulty making their mortgage payments and are being targeted by criminals who charge large upfront fees and falsely "guarantee" to rescue a home from foreclosure. In some of the worst cases, homeowners have been tricked into signing away ownership of their house. Here are some tips on how to protect yourself.

● Try to deal only with lenders, businesses and other organizations you already know or that have been recommended by a reliable source. If you can't pay your mortgage, ask your lender about options for avoiding foreclosure that include lowering your monthly payment by reducing the interest rate or extending the term.

● You don't need to pay a lot of money for help or information. If you think you need assistance working with your lender, get help from a trained, reputable housing counselor who can help you for no charge or a small fee.
Find one through groups such as NeighborWorks America at www.nw.org or by calling 1-888-995-HOPE (4673). Or, for a referral to a local counseling agency certified by the U.S. Departement of Housing and Urban Development (HUD), visit www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call 1-800-569-4287. Lenders, loan servicers and legitimate housing counseling services generally won't charge a fee to help with a loan modification, but scam artists will demand a large upfront fee, often thousands of dollars, and they do very little to actually help the homeowner.

● Make your mortgage payments directly to your lender or mortgage servicer. Some scam artists claiming to offer foreclosure assistance will give some reason why you should send your mortgage payments to them instead of the lender. Soon your money – and the scam artists – will be gone.

● Be especially suspicious of unsolicited offers that arrive via mail, phone, e-mail or a knock on your door. When it doubt, check out a company with your local Better Business Bureau or state consumer protection office. Some companies falsely advertise or represent that they are part of a government-endorsed mortgage assistance network or that they are affiliated with the lender. Be particularly wary of any organization that says it guarantees foreclosure relief or that it has a near-perfect success rate.

● Read and understand any documents before you sign them. It may help to obtain advice from a lawyer or trusted financial counselor. Be on guard against someone who advises you against talking to your lender directly or getting a second opinion elsewhere. Also, be wary of anyone who promises to pay off your mortgage or repair your credit if you “temporarily” sign over to them the deed to your home, because you may be permanently losing your home to a thief.

● If you think you're already caught up in a scam, alert the proper authorities. Good places to start include the Federal Trade Commission (1-877-FTC-HELP or www.ftccomplaintassistant.gov) and your state Attorney General (www.naag.org/attorneys_general). Also, consider contacting an attorney to help you sort through options and attempt to undo any damage.

For more information, check out www.fdic.gov/foreclosureprevention, where you can find resources that include a new FDIC brochure on mortgage rescue scams. To order a copy of that brochure, call toll-free 1-877-ASK-FDIC (1-877-275-3342) and select the option for FDIC publications. Also helpful is the Federal Trade Commission consumer fact sheet at: www.ftc.gov/bcp/edu/pubs/consumer/credit/cre42.shtm.