How is this possible? How could someone just let some crook take their home without a fight? Because the homeowner thought this person was a legitimate financial company trying to help them save their home from foreclosure.
These fraudulent foreclosure "rescue" professionals use lies and half-truths to talk their way into the lives of homeowners all over the country. Their promises of rescuing families' homes and saving money are ones that many can't turn away from, especially when they are teetering on the brink of losing everything.
What are some of the types of Mortgage Assistance Relief Scams?
Phony Counseling / Phantom Help –
The scammers promise to negotiate with your bank to save your home. They charge an exorbitant fee and may even ask you to pay your mortgage payment directing to them which they promise put in a trust until negotiations are finalized. After a few months of stringing you along and collecting money, they disappear with your money, leaving you and your mortgage high and dry.
A company calls with a great offer: for a very steep fee, forensic auditors will comb through your mortgage documents to see if your lender followed each and every regulation.
They claim that the resulting paperwork can be used to speed up the loan modification process or stop the bank from foreclosing on your property. It's only when you try to submit the paperwork to your mortgage company that you discover that the audit was useless – it does nothing to help you.
Scammers ask you to surrender your home's title so they can use their better credit to refinance the mortgage. Then they rent the house back to you, with the idea of putting the money towards the new loan. So, in essence, you are allowed to stay in your house while paying it off over time.
This sounds great, especially to someone who is a stone's throw away from losing their home. The problem comes when either the new owner raises the rent over and over until you can't afford it, they sell the house out from under you, or they never refinance, pocket the rent and let the bank foreclose on you.
The scammer offers you a new mortgage but to get it, you have to sign all new paperwork. If you've ever bought a house, you know the amount of paperwork that you have to sign. So it would be easy to slip in a form that surrenders your house to the scammers. You return home that night, thinking that your house is safe…and then the Sheriff arrives with an eviction notice.
What are some of the signs of a scam?
Do not trust any company that:
- directly contacts you without you first initiating contact
- guarantees to stop your foreclosure no matter what
- suggests any of the above three scams
- pressures you to sign new paperwork, especially papers that you haven't had time to read yet
- collects a fee before they do anything
- only allows you to pay in non-traceable methods (money order / wire transfer / cashier's check)
- suggests that you pay your mortgage payment to them and not the lender
- tells you not to contact your lawyer or lender
What should you do if you suspect a scam?
If you suspect that a company is running a scam, don't just turn your back on them and put on your blinders. Help protect others by reporting them to your local office of the United States Trustee. This section of the Justice Department monitors the bankruptcy system and is very interested in curbing this sudden influx of mortgage scams.