Beware Of Mortgage Foreclosure Rescue And Loan Modification Scams

By Pinyo, on July 16, 2009

Bad economy and high unemployment means there are a lot of families facing financial crisis and possibly home foreclosure. Making Home Affordable refinancing and loan modification program is helping, but unfortunately, not everyone is eligible. This crisis creates opportunities for scammers who promise to stop foreclosure are out to make a quick buck. And this can turn a homeowner’s distress into disastrous nightmare.

FTC Leads “Operation Loan Lies” to Stop Fraud and Help Distressed Homeowners

Recently, the Federal Trade Commission and its partners announced new law enforcement actions against deceptive foreclosure rescue companies. Along with the announcement, the FTC released “Real People, Real Stories,” a video about keeping your home. It features people targeted by foreclosure rescue scams and advises homeowners in distress that free help is available from the Homeowner’s Hope Hotline at 888-995-HOPE (888-995-4673).

More Tips To Help You Avoid Foreclosure Rescue Scams

Be wary if it sounds too good to be true.
Seek assistance from a HUD-approved housing counselor. This service is FREE.
Beware of anyone who asks you to pay a fee in exchange for a counseling service or modification of a delinquent loan.
Beware of people who pressure you to sign papers immediately
Beware of people who try to convince you that they can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
Never make a mortgage payment to anyone other than your mortgage company without their approval.

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Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

All posts by Pinyo

7 Comments

My Journey
July 17, 2009, 9:08

I found it amazing that you even have to mention some of those key items, but I guess when you are getting foreclosure notices people get desparate.
Pinyo
July 17, 2009, 9:13

Just doing my part to help out the FTC and homeowners
FinanciallySmartServices
July 17, 2009, 21:33

It sad that persons will abuse persons vulnerability to scam them.It is wonderful that you have placed it here so that others can beware of what is happening and also to get the necessary help through the right channel.
Connie
July 26, 2009, 11:57

I know Lucas Law Center and a couple other suspected scammers were recently shut down by the FTC for taking up front fees and doing very little. I got caught up in this mess and lost my money while in the foreclosure process. I called John at the Feldman Law Center and got lucky. Feldman discounted his service because I was a victim of Operation Loan Lies and lost my money becaus Paul Lucas and the Lucas Law Center got shut down and it looked like I was out in the cold. Feldman said they normally charge $3500 to $5500 for loan modifications and I only had to make 2 payments of $1250.00 because I lost my money. It looks like I’m in good hands after checking them out with the Attorney General and State Bar I went to their office and was very impressed.
Doug Schindler
August 17, 2009, 18:02

I would like for the public to understand what one OC company is doing or rather has done to me and my family in the last year. We were a middle class family of four, living ok until our loan on our home started to become unmanageable. This was due to a previous attempt at starting or rather buying a couple of entertainment venues in Corona. This failed we were saddled with a mortgage that would soon self destruct.

We were approached through a reference of a friend of ours by a company that supposedly would help us mitigate our damages on our loan, i.e., foreclosure. We were informed by the sales rep immediately upon his review of our loan docs, that we had a good case against the lender because of fraud. Little did we know about who was frauding who. We signed up and agreed to the terms, BUYER BEWARE, NEVER, EVER, stop paying your loan. We were informed that we needed to discontinue paying our loan and not discuss with our lender anything. This we were told was for two reasons, one, they the loan mod company, would be filling in court against our lender for fraudulent practices, and two, if we paid into a “TRUST” Account, i.e. STAD, we would be showing good faith in repaying our debt.

Well a sis so often heard of these days we paid into this “TRUST” Account through STAD, (Saving the American Dream) for a number of months totaling over $11,000.00 Dollars. After a total lack of communication on their part to us, and a continuance of feeling taken, we aggressively pursued a refund. STAD informed us at one point this would not happen, after complaining to the BBB and the DRE, we were contacted by the Pres. of this company , and promised that if he could not get anything done for our mortgage holder a refund would be forthcoming.

This while our middle class family of four was waiting for a short sale to take place, our home had already been scheduled for auction in December of 08. Well, at the end of the day, we lost our home, had our credit ruined, and have yet to see any refund.

After complaining to the DRE, The AG, The BBB, the local Consumer fraud division of the Orange County DA’s Office, we wanted to WARN others about this company. They, the DRE, currently have 34 other complaints filed against this company and it currently is in their legal dept., under review. We also have a case in civil court pending against this company and its legal staff. Additionally, we have filed a complaint against their atty as well. He has an interesting record to boot.

We recently filed with the AG’s special investigation team at which the last question was what we expected as far as a remedy is concerned. Well, having our home back would be nice or compensation thereof as a substitute would be nice. Though realistically, our desire is to not let happen to us happen to another Middle class family. There is a large part of bureaucratic tape in getting these, in our opinion, SCAM companies off the beaten path for consumers that through media and other methods maybe the lack of customers through education will accomplish the same.

Thank you for your time
Cari
August 18, 2009, 3:17

With our economic status today, a loan modification may be the only way for a homeowner to save their home. But most banks that are big doesn’t reply with loan modification inquiries fast because they don’t care if they lose some loans to foreclosure.
Brian
August 20, 2009, 18:13

I was scared that I would get scammed because of all of the news on loan modification scammed after I started with Modification Zoom but they got me a loan modification and they are a great company. Countrywide told me that I didn’t even qualify for a modification but somehow Modification Zoom got me $607 lower on my mortgage payment, so there may be bad companies out there but these guys helped my family so I’m happy with them. I put in there website if you need help and I suggest them.

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