Avoid Mortgage Scams & Fraud

Due to the current economic state, homeowners are willing to do anything to receive help in avoiding defaulting on their mortgage. Fraudulent foreclosure-prevention specialists SELL services that promise to help homeowners avoid foreclosure or get a new mortgage. In reality, these are scam artists that only want to take your money and possibly your home.

It is important to contact your mortgage lender or mortgage servicer directly.

Here are some examples of mortgages scams so that you know what to look for:

Phantom Help - There are scams out there set up to look like assistance to you, the borrower, which end up costing very high fees. These fees really are just to make the phone calls to your mortgage company. The scam artists act like a “go-between” to set up a plan that may reinstate your mortgage or help you market the property. All of this can be done for free if you deal with your mortgage company directly.

Equity Stripping or Bailout - This is when a con or scam artist attempts to help you get rid of your house and avoid the debt. Many borrowers are tricked into surrendering the deed to the house and, in turn, lose any equity they may have built up over the years.

Bait and Switch - In this scheme, the scam artists present themselves as legitimate housing counselors who possess an abundance of paperwork. In this paperwork is the grant deed, deeding the house to a third party. The borrower is still liable for the payments, and thus no better off than they were.

Imitations – There are con artists that use websites, company names, and phone numbers to look like they are part of the government. Research any web address you are not sure about. Always use phone numbers listed on agency websites or use other reliable sources.

We always encourage the use of credible agencies to assist you in credit and housing counseling.

• Contacting the local office of the U.S. Department of Housing and Urban Development (www.hud.gov) or the housing authority in your state, city, or county for help in finding additional counseling agencies nearby.
• Contacting the NeighborWorks® Center for Foreclosure Solutions Homeowner's HOPE™ hotline at 1-888-995-HOPE™. NeighborWorks® America, Homeownership Preservation Foundation and HOPE NOW have joined forces to provide free, HUD-approved counseling 24-hours a day. Visit their websites at www.nw.org, www.995hope.org or www.hopenow.com. HOPENOW is an alliance between HUD approved counseling agents, servicers, investors and other mortgage market participants that provides free foreclosure prevention assistance.
• Learn more about mortgages and other credit-related issues by visiting www.ftc.gov/credit and www.MyMoney.gov the U.S. government's portal to financial education.