• An upfront fee in exchange for saving your home or helping you avoid foreclosure;
• Any suggestion that you stop making your mortgage payments or funnel your payments through an outside company;
• Instructions to ignore mail from your lender or not to have any communication with your lender;
• Requirements that you pay with a cashiers check or wire service;
• Requests to buy your house for a price not in line with the housing market at the time of sale;
• Offers to fill out paperwork concerning your home or mortgage on your behalf; or,
• Pressure to sign paperwork you have not read or do not understand.
Consumers facing foreclosure often find themselves contacted by phone or mail by so-called “foreclosure rescue” companies who make promises, such as “Stop Foreclosure Now” or “Guaranteed to Stop Your Foreclosure.” These proclamations are usually based around a basic scam ending with the swindler stealing hundreds or thousands of dollars from you or worse – obtaining the title to your home.
Without fail, foreclosure-rescue firms falsely declare they can help the homeowner deal with the lender, avoid foreclosure and/or guarantee they’ll obtain a loan modification for you in exchange for a substantial upfront fee. (Upfront fees are illegal under Colorado law.) These companies routinely advertise a “special” relationship with lenders and a “proven” record of helping homeowners stop foreclosure.
These advertisements are deceptive and only geared toward getting you to fork over an upfront fee or have a monthly payment automatically taken out of your bank account or charged to your credit card.
Some firms will have you sign over the title to your home in exchange for ongoing payments, frequently referred to as a “rent-to-own” arrangement, whereby you buy back your own home. Ultimately these scams result in not only homeowners losing thousands of dollars in “rent” but without a home.
Red Flags That a Loan Modification Company is a Scam:
Seven red flags consumers should be aware of when contacted by a loan modification company:
There are many red flags that consumers can use to help identify a loan modification scam. The best way to prevent a loan mod scam is to have a licensed attorney assist with your loan modification efforts.