Mortgage foreclosures are on the rise, and many people are trying to restructure their mortgages. That means mortgage scams are everywhere. Plenty of companies are claiming they can save homeowners from foreclosure or get a lower interest rate or monthly payment. There are a growing number of advertisements offering home loan modifications–or foreclosure rescue plans–for up-front fees. Homeowners say they paid up-front fees for home loan modifications, but the companies are not delivering on promises.
FBI special agents who specialize in mortgage fraud investigations offer the following warning: Be cautious of a company's pitch for fees; many banks and lenders offer free help for homeowners seeking home loan modifications.
Home loan modification programs can be a way for homeowners who face foreclosure to keep their homes. When done properly, a homeowner who qualifies may be able to lower his or her monthly payments. Many lenders offer this service for free, and there are a number of HUD-approved counselors who can answer homeowners' questions about the process. There is one place you should start: the US government's Making Home Affordable website. This is a government-run website that guides homeowners through the process to avoid scams.
FBI mortgage fraud investigators and state investigators have noted a steady number of complaints about various companies that claim to offer home loan modifications. Homeowners say they've paid as much as $3,000 in fees, filled out paperwork, and thought the companies would modify their loans. But consumers report that some companies aren't following through with the process, while other companies claim the homeowner didn't qualify for a loan modification. Unfortunately, by the time consumers figure out they've been scammed they've lost the fees and are closer to losing their homes. Such cases are a growing concern to FBI Special Agent in Charge Timothy J. Fuhrman and Executive Director of the Utah Department of Commerce, Francine Giani. "Foreclosure rescue scams are possibly the most egregious of all consumer scams," said Giani. "Here homeowners lose twice. They lose their home and their money to fraudsters who prey on their desperate situation with nothing to offer but empty promises." "We want to warn homeowners before it's too late," said Fuhrman. "Usually, by the time someone reports a problem, they've been victimized. We want consumers to know how to spot a scheme and where they can get the legitimate help they need if times get tough."
The United States Department of Housing and Urban Development, and the FBI Salt Lake City Field Office have compiled a list of resources to help homeowners.
Also see this page on Scholarship, Student Loan and Financial Aid scams!
See this page for examples of the scams and FBI reports of the scammers, their trials and names.
If you believe you may have fallen victim to this type of scam and wish to report it, please