Homeowners who are struggling to make their mortgage payments have enough on their minds without having to worry about being defrauded. But mortgage modification scams are a growing problem and, if you don’t keep your eyes open for them, they can cost you money or even your home.
Beware of third party offers
Third parties cannot guarantee or pre-approve modifications to your mortgage. The only organization with the power to do that is your mortgage company. Additionally, third parties may not improve your chances of receiving a mortgage modification. In particular, be on the lookout for companies that pressure you to sign documents you aren’t familiar with or don’t understand, or that offer you cash for your home below the market value.
Watch for common lies in scams
The HAMP program was a 2009 federal program designed to help struggling homeowners; however, it was discontinued in 2017. Treat any call or email offering a HAMP modification with skepticism.
Most of the time, it’s illegal to charge fees in advance of a mortgage modification. Be wary of anyone requiring money up front.
Scammers often make solicitations claiming they are from your mortgage company. They will then demand that you send payments to an address that is different from that of your mortgage company. When in doubt, verify the address against your billing statement to ensure the address is legitimate.
Scammers may also claim that they can only accept your payment as a cashier’s check or wire transfer. They may tell you to stop making your mortgage payments and to cease all contact with your mortgage company. Or they may ask you to sign over your deed to forgive the outstanding debt. Any of these can be a red flag that an individual or organization is not on the level.