As previously reported in
FDIC Consumer News, many
homeowners having difficulty making their monthly mortgage payments are being
targeted by criminals who charge large upfront fees and falsely "guarantee" to
rescue a home from foreclosure. In some of the worst cases, homeowners have
become victims of identity theft or were tricked into signing away their
ownership of a house. Because mortgage rescue scams continue to be a big
problem, we offer our latest tips on how to protect yourself.
Try to deal only with lenders, businesses and other organizations you
already know or that have been recommended. If you can't pay your
mortgage, ask your lender or loan servicer (the company that collects payments
and performs other work for the lender) about options for avoiding foreclosure
that include lowering your monthly payment by reducing the interest rate,
extending the term or adjusting the loan balance.
You don't need to pay a lot of money for help or
information. If you think you need assistance working with your lender,
get help from a trained, reputable housing counselor who can help you for no
charge or a small fee. Find one through groups such as NeighborWorks America (www.nw.org) or by calling 1-888-995-HOPE (4673).
Or, for a referral to a local counseling agency certified by the U.S. Department
of Housing and Urban Development (HUD), visit www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
or call 1-800-569-4287.
Lenders, loan servicers and legitimate housing counseling services generally
won't charge a fee to help with a loan modification. "But scam artists will
demand a large upfront fee, often thousands of dollars, and they do very little
to actually help the homeowner," said Robert W. Mooney, FDIC Deputy Director for
Consumer Protection and Community Affairs.
Also look at the new U.S. government program for loan modifications and
refinancings (see Making Your Home
Affordable). There is no fee to get assistance or information about this
program from your lender or a HUD-approved housing counselor.
Make your mortgage payments directly to your lender or the mortgage
servicer. "Some scam artists claiming to offer foreclosure assistance
will give some reason why you should send your mortgage payments to them instead
of the lender," added Mooney. "Soon your money — and the scam artist — will be
gone."
Be especially suspicious of unsolicited offers that arrive via phone,
e-mail or a knock on your door. When in doubt, check out a company with
your local Better Business Bureau or state consumer protection office.
"Some companies have falsely advertised or represented that they are part of
a government-endorsed mortgage assistance network or they are affiliated with a
lender," warned Michael Benardo, manager of the FDIC's Financial Crimes
Section.
Be particularly wary of any organization that says it guarantees foreclosure
relief or that it has a near-perfect success rate.
Read and understand any documents before you sign them. It
may help to obtain advice from a lawyer or trusted financial counselor.
"Be on guard against someone who advises you against talking to your lender
directly or getting a second opinion elsewhere," added Benardo. "Also be wary of
anyone who promises to pay off your mortgage or repair your credit if you
'temporarily' sign over to them the deed to your home, because you may be
permanently losing your home to a thief."
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"Try to deal only with lenders, businesses and other organizations you
already know or that have been recommended. If you think you're already caught
up in a scam, alert the proper authorities."
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If you think you're already caught up in
a scam, alert the proper authorities. Good places to start include the
Federal Trade Commission (1-877-FTC-HELP or www.ftccomplaintassistant.gov)
and your state Attorney General (www.naag.org/attorneys_general).
Also, consider contacting an attorney to help you sort through options and
attempt to undo any damage.
For more information, check out www.fdic.gov/foreclosureprevention,
where you can find resources that include a new FDIC brochure on mortgage rescue
scams. To order up to five paper copies of that brochure, call toll-free
1-877-ASK-FDIC (that's 1-877-275-3342) and select the option for FDIC
publications. Also helpful is a Federal Trade Commission consumer fact sheet at
www.ftc.gov/bcp/edu/pubs/consumer/credit/cre42.shtm.
