Federal officials announced on Monday, April 62009 that they are cracking down on mortgage modification scams. This announcement came out after repeated complaints of criminal actors preying on desperate borrowers caught up in the nations housing crisis. Officials say that these scammers are seeking to take advantage of homeowners by charging them upfront fees ranging from $1,000- $3,000 in exchange for helping them modify their mortgage that rarely pay off.
Many of the scammers are using official-sounding names that sound like they are part of a government act and use those names to mislead borrowers into thinking they are getting help from President Obama’s administration. Treasury Secretary Timothy Geithner said, “These predatory scams callously rob Americans of their savings and potentially their homes… We will shut down these fraudulent companies quickly and will target companies that would have otherwise gone under the radar.”
Over 71 companies have received letters from the Federal Trade Commission that were running misleading advertisements. Some of the companies alleged were: Federal Loan Modification Law Center LLP, Bailout.hud-gov.us and Home Assure LLC. Although many of these companies predominantly reside out in California, they are springing up all over and consumers should be on the look out for companies promising to give loan modifications.
Last month the FTC filed cases against two companies: Hope Now Modifications LLC and New Hope Modifications LLC. Meanwhile, Attorney General Eric Holder says the FBI is investigating about 2100 mortgage fraud cases, up 400 percent from just five years ago.
Consumers should be on the look out for companies who are promising to stop foreclosure or get any kind of modification. Lenders have certain guidelines that the requirements they must follow and are ultimately up to the investor holding the note’s discretion.
Other tip offs of potential scams include guarantees that they will modify your loan of stop foreclosure. Another tactic is the use of claims, particularly, 97% success rate and official –sounding names. Other dirty tactics are manipulating mail to make it look like it came directly from the lender.
It is unfortunate that people are still continuing to prey on those in vulnerable situations hoping for a magic pill being promised by a salesperson. Borrowers can go modify their loans directly through their own lenders and should be leery of anyone making false promises.
Comments(0)