By: Consumer Financial Protection Bureau
WASHINGTON – Millions of homeowners struggled to make their mortgage payments during the COVID-19 pandemic, and it’s important for all homeowners to know about mortgage loan modification scams and how to avoid them.
Mortgage loan modification scams are schemes to take your money – often by making a false promise of saving you from foreclosure. These so-called foreclosure or mortgage consultants often use public notices or lists of distressed borrowers purchased from private companies to find their targets. They may offer to “prevent” foreclosures or “rescue” desperate homeowners from foreclosure through advertising, email, phone calls or in person.
Examples of scams related to mortgage modification and foreclosure prevention include, among others:
Foreclosure rescue and refinance fraud. Scam artists offer to act as intermediaries between homeowners and lenders to negotiate repayment plans or loan modifications. They may even “guarantee” to save your home from foreclosure. They tell you to make mortgage payments directly to them so they can forward payments to your lender. Instead, they may pocket your money and leave you in worse shape on your loan.
Fake “government” modification programs. Scam artists create websites that mimic federal websites and use business names like those used by government agencies. They may use “federal,” “TARP” or other words, acronyms and…