NeighborWorks America
Rita Santos was having trouble keeping up with her mortgage payments. When served with foreclosure papers in December of 2008, she approached a financial company whose television advertisements promised foreclosure assistance.
The company told the single mother of a son with disabilities that it could modify her home loan for a fee of $1,600. So Rita wrote a check for $600 to get the process started. But when she called the office to follow up, no one would take her calls. Her messages went unreturned for months.
When Rita finally did hear back, it was a demand for the other $1,000—even though the company had nothing to show for the money and time Rita had already invested. “I was desperate,” Rita recalls. “My heart goes out to anyone who has been taken by these scam artists.”
Rita called the U.S. Department of Housing and Urban Development for advice. That’s how she found local NeighborWorks® America affiliate Centro Campesino Farmworker Center, Inc.—and discovered it’s against the law for companies like the one she was working with to charge for loan modification assistance. Centro Campesino immediately began working with Rita, explaining step-by-step how to file for a loan modification on her own.
It took a detailed diary, notarized paperwork, two court extensions, even letters to state legislators, but Rita was approved in September of 2009. Her home is safe, thanks to trusted advice from Centro Campesino and her own initiative.
“There’s help out there,” Rita says. “But as the homeowner, you have to be prepared to do your part too.”
It’s a growing problem across the country: Homeowners facing foreclosure are losing their money, and their homes, to loan modification scams. Information is your best defense. If you see the signs of a scam and know the facts, you can protect yourself.
Scams aren’t always easy to spot. Here are six red flags to indicate that you may be dealing with a loan modification scammer:
1. A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.
2. A company/person guarantees they can stop a foreclosure or get your loan modified. Nobody can make this guarantee to stop foreclosure or modify your loan.
3. A company/person advises you to stop paying your mortgage company and pay them instead. Despite what a scammer will tell you, you should never send a mortgage payment to anyone other than your mortgage lender. The minute you have trouble making your monthly payment, contact your mortgage lender.
4. A company pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read, and you don’t fully understand.
5. A company claims to offer “government-approved” or “official government” loan modifications. They may be scam artists posing as legitimate organizations approved by, or affiliated with, the government. Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure. Remember, you do not have to pay to benefit from government-backed loan modification programs.
6. A company/person you don’t know asks you to release personal financial information online or over the phone. You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.
Loan modification scams are proliferating at a rapid pace. Every day, scam artists prey on unsuspecting homeowners who are facing foreclosure. These homeowners are losing thousands of dollars and their homes—lured by the promise of loan modification help.
To combat this issue, Congress asked NeighborWorks America to launch a national public education campaign. The campaign will empower homeowners to protect themselves against loan modification scams, find trusted help and report illegal activity to authorities. For loan modification guidance or to report a scam, call: 1-888-995-HOPE (4673).
NeighborWorks America is working with national, state and local partners on the ground, and 235 community-based affiliates. Together, we will alert thousands of homeowners in hundreds of at-risk communities through real-life scam stories, fliers, postcards, e-cards, posters, print advertising, local PSAs, events, word of mouth and social media activity.
NeighborWorks America is also working with a variety of government agencies and non-profit organizations in a multi-agency show of force to crackdown on loan modification scams.
Our partners include The Federal Trade Commission, The U.S. Department of Housing and Urban Development, The U.S. Department of Justice, The U.S. Department of the Treasury, State Attorneys General, National Fair Housing Alliance, Homeownership Preservation Foundation, Fannie Mae, Freddie Mac and the Lawyers’ Committee for Civil Rights Under Law.
Many other national, state and local organizations lend their time and expertise to our campaign. Get customizable materials to fight loan modification scams in your community at http://www.loanscamalert.org/default.aspx (available in 5 languages).
The company told the single mother of a son with disabilities that it could modify her home loan for a fee of $1,600. So Rita wrote a check for $600 to get the process started. But when she called the office to follow up, no one would take her calls. Her messages went unreturned for months.
When Rita finally did hear back, it was a demand for the other $1,000—even though the company had nothing to show for the money and time Rita had already invested. “I was desperate,” Rita recalls. “My heart goes out to anyone who has been taken by these scam artists.”
Rita called the U.S. Department of Housing and Urban Development for advice. That’s how she found local NeighborWorks® America affiliate Centro Campesino Farmworker Center, Inc.—and discovered it’s against the law for companies like the one she was working with to charge for loan modification assistance. Centro Campesino immediately began working with Rita, explaining step-by-step how to file for a loan modification on her own.
It took a detailed diary, notarized paperwork, two court extensions, even letters to state legislators, but Rita was approved in September of 2009. Her home is safe, thanks to trusted advice from Centro Campesino and her own initiative.
“There’s help out there,” Rita says. “But as the homeowner, you have to be prepared to do your part too.”
It’s a growing problem across the country: Homeowners facing foreclosure are losing their money, and their homes, to loan modification scams. Information is your best defense. If you see the signs of a scam and know the facts, you can protect yourself.
Scams aren’t always easy to spot. Here are six red flags to indicate that you may be dealing with a loan modification scammer:
1. A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.
2. A company/person guarantees they can stop a foreclosure or get your loan modified. Nobody can make this guarantee to stop foreclosure or modify your loan.
3. A company/person advises you to stop paying your mortgage company and pay them instead. Despite what a scammer will tell you, you should never send a mortgage payment to anyone other than your mortgage lender. The minute you have trouble making your monthly payment, contact your mortgage lender.
4. A company pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read, and you don’t fully understand.
5. A company claims to offer “government-approved” or “official government” loan modifications. They may be scam artists posing as legitimate organizations approved by, or affiliated with, the government. Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure. Remember, you do not have to pay to benefit from government-backed loan modification programs.
6. A company/person you don’t know asks you to release personal financial information online or over the phone. You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.
Loan modification scams are proliferating at a rapid pace. Every day, scam artists prey on unsuspecting homeowners who are facing foreclosure. These homeowners are losing thousands of dollars and their homes—lured by the promise of loan modification help.
To combat this issue, Congress asked NeighborWorks America to launch a national public education campaign. The campaign will empower homeowners to protect themselves against loan modification scams, find trusted help and report illegal activity to authorities. For loan modification guidance or to report a scam, call: 1-888-995-HOPE (4673).
NeighborWorks America is working with national, state and local partners on the ground, and 235 community-based affiliates. Together, we will alert thousands of homeowners in hundreds of at-risk communities through real-life scam stories, fliers, postcards, e-cards, posters, print advertising, local PSAs, events, word of mouth and social media activity.
NeighborWorks America is also working with a variety of government agencies and non-profit organizations in a multi-agency show of force to crackdown on loan modification scams.
Our partners include The Federal Trade Commission, The U.S. Department of Housing and Urban Development, The U.S. Department of Justice, The U.S. Department of the Treasury, State Attorneys General, National Fair Housing Alliance, Homeownership Preservation Foundation, Fannie Mae, Freddie Mac and the Lawyers’ Committee for Civil Rights Under Law.
Many other national, state and local organizations lend their time and expertise to our campaign. Get customizable materials to fight loan modification scams in your community at http://www.loanscamalert.org/default.aspx (available in 5 languages).
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