Federal prosecutors and many state attorney general offices are now planning joint efforts to target firms that are marketing help to homeowners who are in imminent danger of foreclosure but are swindling homeowners out of their money instead of helping them modify their current home loan.
Cooperation between these agencies will most likely result in a larger amount of criminal prosecutions. This will be made possible through shared information from federal and state agencies on loan modification scams.
Non-profit housing counselors approved by the Department of Housing and Urban Development (HUD) will offer help to homeowners that are trying to receive home loan modifications. These non-profit counselors do this for free. However, there are a growing number of firms that are targeting homeowners that are in danger of foreclosure. Many of these firms are offering to help homeowners with loan modifications for fees ranging in the thousands of dollars. Homeowners think that they are being helped with loan modifications, but some of these firms are collecting these fees and doing almost nothing to help homeowners with the modification process.
The number of firms that doing nothing more than collecting upfront fees instead of actually helping struggling homeowners stay in their homes is rising at an alarming rate. This is one of the main reasons for the joint efforts of state and federal agencies.
These loan adjustment scams started almost immediately after President Obama announced the federal housing plan last February.
Loan modifications are the main agenda behind the $75 billion Making Home Affordable program. This program was designed to slow the rising number of foreclosures by adjusting loans to better fit borrower incomes. This program is hitting stumbling blocks because of all the loan modification scams and the slow response by lenders to help struggling homeowners with loan modifications.
Federal and state prosecutors are specifically going after firms that target struggling homeowners and illegally guarantee home loan modifications that they claim to be able to get for them.
If you suspect you, a friend or a family member are being scammed, contact the Federal Trade Commission at 877-382-4357 or visit them online at www.ftc.gov
Homeowners have to be careful and question any deals that seem too good to be true. Number 1, do not pay any upfront fees. Number 2, get all the promises in writing. Number 3, take the documents to your lawyer before signing anything. Remember, no-one can guarantee you a mortgage modification. And finally, if you need help, it’s free.