Mortgage modification scams can occur when unscrupulous people prey on borrowers who are struggling to keep their homes. While they promise to help, the people who perpetuate mortgage scams do little to no work, charge excessive fees, and use tactics that often put the homeowner at greater risk of losing their home. If you’re modifying your mortgage or facing foreclosure, here are five keys ways to protect yourself from mortgage rescue scams.
Do your homework and know your options
Ask questions and get explanations so that you have a complete understanding of any modification or refinance. Always be sure to read and understand all paperwork before signing. Don’t sign papers in exchange for a promise that someone else will pay off your mortgage.
Don’t pay for counseling. Free, legitimate help is available
Beware of high-pressure sales tactics, including pressure to act quickly, and deals that appear to be too good to be true – they are. A legitimate housing counselor will never ask you to sign paperwork before you understand it. You don’t need to pay for counseling – call 888-995-HOPE or go to www.HUD.gov to find a free HUD-Approved housing counselor.
Know the person you’re working with. Make sure your housing counselor is HUD-approved
Before responding to any person or organization offering to “save” you from foreclosure, find out if the organization is HUD-approved. Find a housing counselor on the HUD.gov website. Your lender or a HUD-approved housing counselor is the safest source of information and help. No one should guarantee you they can stop foreclosure.
Don’t submit your mortgage payments to anyone other than your mortgage company. Beware of people who ask you to send your payment to them
Scammers might ask you to make your payments to them; however, they pocket your payments instead of sending them to the lender. You should only send your mortgage payment to your mortgage company.
Ask for Help. Again, free, legitimate help is available
Contact the HOPE Hotline (1-888-995-HOPE) or Fannie Mae at 1-800-7FANNIE (732-6643) or your servicer for help. To report a scam, visit www.preventloanscams.org. To learn more about avoiding scams, visit www.loanscamalert.org.