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Don't Fall for Mortgage Modification Scams

Homeowners who are financially distressed can be targets for scammers. In particular, scammers have recently focused on the federal Making Home Affordable Program, which provides many options to help homeowners with their mortgage challenges. Scammers are taking advantage of this program by promising that they can modify the mortgage or eliminate the mortgage debt.

What are some red flags that it's a scam?

  • They state that you are pre-approved for a loan modification or that they guarantee that your loan will be modified. Only your lender can grant a loan modification.
  • They ask for an up-front fee. The Mortgage Assistance Relief Services Rule issued in 2010 banned up-front fees.
  • They make claims of high success rates, guarantee extremely low interest rates, and money-back guarantees.

The FBI has more tips to help you spot these scams.

What can you do if you are in financial trouble?

  • Talk to your lender first.
  • You can talk to a housing counselor approved by the Department of Housing and Urban Development.
  • Learn about the various options provided by the Making Home Affordable Program by visiting their website or calling 1-888-995-HOPE.