Shutting Down Scams
In a recent victory in the battle against loan modification scams, the Consumer Financial Protection Bureau (CFPB) announced that they have shut down the operations of two alleged scam organizations that may have bilked as much as $10 million from thousands of struggling homeowners. These scam artists, like so many others that continue to lure in homeowners each day, charged large amounts of money for “guaranteed” foreclosure prevention services that were never rendered.
HPF’s anti-scam hotline, which can be reached by calling our Homeowner’s HOPE Hotline at 888-995-HOPE, receives hundreds of calls each week from homeowners who believe they may have been victims of a loan scam. The stories our anti-scam counselors hear are heartbreaking – people borrowing money from family members to pay a scam organization that disappears overnight, or mortgages falling into default as a homeowner allocates next month’s mortgage payment for a promised modification, later discovering that their lender was never even contacted. Many of these real-life tales are featured on the website of the Loan Modification Scam Alert Campaign, an awareness initiative launched by NeighborWorks America in partnership with HPF and other housing affiliates.
The most important tip to know to avoid foreclosure avoidance scams? If a person or organization asks for an upfront payment, beware! Asking for advance fees for loan modification services is ILLEGAL and a telltale sign of a scam. While lawyers are technically allowed to charge a retainer in advance of legal services, note that around half of reported scam activity involves attorneys or individuals claiming to offer “legal services.” Another major warning sign is a company or person guaranteeing to stop a foreclosure; in fact, no one other than your lender can guarantee that you will be able to avoid a foreclosure. A more detailed list of scam warning signs is available on the HPF website by clicking here.
If you believe you have been the victim of a scam, please call the Hotline at 888-995-HOPE (4673) to report it. The information you share with our anti-scam team will be used by law enforcement agencies as part of their investigation into these organizations.