Loan modification scams cost consumers considerably and it is imperative to know how to spot them and avoid them. As the economy shudders, these real estate scams will become increasingly common and consumers should stay alert for deals that “sound too good to be true.” The following tips can help consumers avoid the traps these scammers set.
1. Watch for Upfront Fees
Many scammers offer their services only after homeowners pay an upfront fee. Once paid, the scammer vanishes into thin air, phone numbers no longer work, and the money evaporates.
2. Avoid “offers” to Forward the Mortgage Payment
Scammers may offer to forward the mortgage payment to the lender. Homeowners should never send these payments to anyone but the lender.
3. Pay Attention to Titles
If the person’s title sounds too good to be true, or too illustrious for the job duty, it is likely a made-up, meaningless title crafted to entice consumers to fork over their money.
4. Run when the Internet Draws a Blank
The internet is filled with information, and a quick search can help consumers find practically anything and everything about a company. If the company doesn’t have a website (or has a website that looks less than professional), isn’t registered to do business in the state, or has a host of negative reviews, consumers should run.
5. Always Contact an Attorney
Scammers are masters of making outlandish promises. They will tell consumers their interpretation of the law and how they have a system that uses a rule or statute to go around the law or regulation. It may sound official, it may sound good, but any legal advice they offer should always be verified by a licensed attorney.
6. Always be Skeptical
Scammers know that consumers facing mortgage defaults and foreclosure are under significant stress. They use this to their advantage and prey on people eager for a way out of their financial predicament. Consumers contacted by these fraudsters should always be skeptical, should never pay for the “help,” and should guard personal details, deeds, and other documentation carefully.
Finally, the US Department of Housing and Urban Development offers free loan modification counseling. Consumers can contact the nearest office and learn more about the options available to them and the steps required to complete a proper loan modification.