Selling Reno And Sparks Real Estate Blog


Beware of Foreclosure Rescue and Loan Modification Scams

Homeowenrs should always be wary of promises for loan modification, mortgage relief, and foreclosure rescue as scammers continue to prey on consumers who are vulnerable and financially stressed .  In most states, it is illegal for any person, including lawyer and real estate licensees,  to demand, charge, or collect any advance, up-front, yet scammers continue to prey on homeowners!  


Beware of Foreclosure Rescue and Loan Modification Scams

Foreclosure Scam

Con artists still work the 'foreclosure rescue' game Because some homeowners are unable to make their mortgage payments, they may grasp for any plan they think will help them avoid foreclosure. They might even come up with thousands of dollars to pay unscrupulous con men. Here's how the frauds work.

Scammers set themselves up with an official-sounding name, one similar to a legitimate organization, and claim to be approved to make loan modifications. After taking $4,000 of the homeowner's money, they disappear.

In another fraud, scammer companies send a salesperson to call on homeowners and say they can audit their mortgage documents and use the violations to force their lender to approve a loan modification. They tell people they have found violations 90 percent of the time. These types of scams typically ask for $1,000 to $5,000 from the homeowner.

One con man collected $2.8 million from various homeowners by promising them he could guarantee a loan modification under the Home Affordable Modification Program (HAMP). He told them to stop making their payments and to avoid contact with their lenders. Some of his victims would have been able to modify their mortgages if they hadn't stopped making the payments.

Three scammers were arrested on charges of fraud against California homeowners. In addition to requiring up-front fees in exchange for loan modification assistance, they told one homeowner to reject his lender's offer of a loan modification because they could get a better deal. Instead, the home was lost to foreclosure within four months.

The attorneys general settlement with the five largest mortgage lenders brought out a new group of people who call homeowners and tell them they represent the lender. They request $500 or more to facilitate the homeowners getting money from the settlement. The homeowner never gets anything. 

Gabe Sanders; Stuart Florida Real Estate
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Comment balloon 2 commentsTerrie Leighton • January 28 2013 06:24AM


Sorry you didn't get any points on this post?  I don't know why, but I still think it has good info  !

Posted by Kristin Johnston - REALTOR®, Giving Back With Each Home Sold! (RE/MAX Realty Center ) about 7 years ago

Terrie - Great choice of re-blog! This is information that the general public needs to be aware of.

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) about 7 years ago

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