Beware Of Mortgage Scammers

Free counseling is available at the Department of Housing and Urban Development (HUD) for distressed homeowners who now don’t have to make use of third-party mortgage services.

Qualified homeowners are allowed to refinance their homes at more favorable terms by HUD programs like the Home Affordable Refinance Program (HARP).

A homeowner can work directly with your lender or consult with third-party mortgage counseling services if they don’t qualify for any HUD programs. But they must be careful of fraudsters.  

Scammers take advantage of desperate homeowners without providing any assistance in return.

In 2018 the Federal Trade Commission (FTC) sued a group of firms that made false claims of a 98% or higher success rate and suggesting distressed homeowners that they could save hundreds of dollars every month and cut mortgage interest rates by 50%. 

The firms had modified logos and left the false impression of endorsement by HUD’s Making Home Affordable (MHA) programs.

Many customers were charged upfront fees for services and did not receive any loan modifications at all. In some cases, some consumers were advised not to contact their lender or make mortgage payments.

Be aware of the advice that asks you to ignore lenders/payments, charge you upfront fees, and make money-back guarantees for any mortgage service, especially without discussing your situation when the guarantees are made. 

Though attorneys may charge upfront fees for mortgage services, provided they have a license to practice law in your state and are complying with a special set of rules.

To protect consumers from these types of scams, The Mortgage Assistance Relief Services (MARS) rule was created. 

Before searching for any mortgage relief services homeowners are urged to check out the compliance guidelines of the MARS rule.

These guidelines can help homeowners easily spot a scammer.

Not only distressed homeowners are targeted but many times scams are designed to get personal information. 

They could pose that they are part of an Attorney General’s settlement and want bank routing information to deposit the refund.

Other scams target upfront payments. 

Where you may be contacted to join a class action suit against your lender but asked to pay fees to become part of the lawsuit. 

Please beware there are no fees to join a class-action lawsuit.

Before accepting any third-party mortgage services, research the company online, check with the Better Business Bureau (BBB) for any complaints or your state Attorney General’s office.

There is never a simple solution for refinancing a home or avoiding foreclosure. 

Stay with HUD-approved programs and counselors with verified credentials. Consult professionals who can give you the right advice for your situation.