Mortgage Relief Scams
If you have fallen behind on mortgage payments and are facing foreclosure, you are probably looking desperately for a solution that allows you to keep your house. There are many places you can turn for help, but, unfortunately, some of the mortgage relief solutions are actually scams. Learn what they look like so you can protect yourself and have the best possible chance of keeping your home.
How mortgage relief scams work
There are several types of scams, and each one works by a slightly different method. The less sophisticated scams involve people claiming they will help you get a mortgage modification to keep your house if you pay them a fee. Once you pay a fee, they run without doing anything for you. Some of the more sophisticated scams work by getting you to sign over the deed to your house without giving you the money that your house is worth.
Who scammers appear to be
Depending on the type of scam, the individual or organization that approaches you may pose as one of the many types of financial authorities. In one common ploy, the scammer poses as an attorney who will help fight the foreclosure process for you. In another, the scammers might approach you under the guise of a loan modification company that will negotiate with the lender on your behalf. Scammers can also appear to be potential buyers for your home who say they want to help you stay in the house.
What scammers offer you
Scammers offer you an easy solution, often one that sounds too good to be true. They tell you that regardless of your situation, they can help you keep your house. They might offer to stall the legal proceedings of foreclosure until you can get back in a position to pay your mortgage. Some scammers will offer to purchase your home from you and let you buy it back under a rent-to-own agreement, but these deals will rarely work out as planned.
Tips to protect yourself from these scammers
In any financial or legal dealings related to your home, be on the lookout for red flags that suggest you may be involved with a scammer:
- Making promises that seem too good to be true
- Guaranteeing results before even knowing your financial situation
- Having you make mortgage payments to them rather than your lender
- Discouraging you from contacting your lender directly
- Charging steep up-front fees for services
- Asking you to sign over the title to your home
Before getting involved with any third party, do your research online to learn more about that individual or company. If you are hiring a lawyer, check credentials and ask for references. Overall, keep your guard up and don't allow anyone to pressure you into doing something you do not understand or don't feel ready for.
Where to find real help
There are legitimate ways to get relief when you are facing potential foreclosure, but you will often need to seek them out on your own. First, call your lender as soon as you know you will have trouble making a mortgage payment. You may be able to work out a modified repayment schedule that will keep your loan in good standing.
You can also use many legitimate credit counselors who offer personalized advice about your situation. One good resource is the Homeownership Preservation Foundation (HPF), which has a free hotline at 1-888-995-HOPE to help at-risk homeowners. The Department of Housing and Urban Development (HUD) also maintains a database of housing counseling agencies that have the government stamp of approval.