Home Loan Modification Scams–Homeowners Seeking Making Home Affordable Assistance Cautioned

Many homeowners have become troubled in their mortgage over the past months and as a result have sought out a home loan modification from their mortgage lender. However, there have been difficulties between homeowners and lenders who are servicing these modifications and, as a result, certain housing counseling agencies have arisen to help homeowners in these situations. Yet, there have been scams perpetrated against many homeowners from companies who say that they can aid homeowners who are seeking mortgage assistance.

The Making Home Affordable Program website provides warnings about scams that claim to be able to rescue homeowners from foreclosure. There are instances where homeowners may be given an offer from one of these scam companies that makes claims like offering a guarantee to save a homeowner from losing their home.

Typically, these fraudulent companies will charge a fee to a homeowner in return for their assistance, and many of these companies say that they can actually contact or work with a homeowner’s mortgage servicer. Yet, not all of these housing counselors are reputable and, since there have been homeowners who have been swindled by these companies, approved housing counselors are listed on the Housing and Urban Development website for homeowners to reference, depending upon their state and location.

Other warnings that may point to a scam from a company who offers home loan modification assistance come in the form of a company asking for fees for their counseling service, a company or individual who suddenly offers to aid a homeowner who is struggling to pay their mortgage or maybe be considering the sale of their home, companies who offer to help save a home if the homeowner will transfer the deed of their house to that company or individual, or a company who asks that direct mortgage payments be made to them.

One of the main themes to avoiding the scams seems to be working directly with lenders and following their guidelines to obtaining mortgage assistance. While, again, there are approved housing counselors available, homeowners are often advised to only follow the instruction of their mortgage servicer when it comes to obtaining a home loan modification or foreclosure prevention assistance. Care must be taken since there are more and more fraudulent companies claiming to be representatives of a mortgage lender or servicer but are only looking to take advantage of a homeowner who happens to be in a bad situation.