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August 19, 2017 You are here : How to spot a scam

6 THINGS YOU SHOULD KNOW

Anyone can be scammed if they don’t know the warning signs to look for. Here are six red flags to indicate that you may be dealing with a loan modification scammer:

 
It is illegal for a company/individual to charge fees in advance for these services according to the Federal Trade Commission (FTC) Mortgage Assistance Relief Service (MARS) Rule. Note: Attorneys are allowed to charge fees in advance if they meet certain requirements and place fees in a client trust account ( FTC MARS Rule Compliance Guide for attorneys). But be careful! Attorneys, and people claiming to be attorneys, have been known to take advantage of homeowners, too.
Nobody can make this guarantee to stop a foreclosure or modify your loan. Many scammers offer “money-back” guarantees to make homeowners feel more comfortable. But why do you need a money-back guarantee when getting a loan modification is supposed to be free? Legitimate, trustworthy HUD-approved counseling agencies will only promise they will try their very best to help you.
Despite what a scammer will tell you, you should never stop paying your mortgage to improve your chances of getting a loan modification. Also, never send a mortgage payment to anyone other than your mortgage lender. As soon as you have trouble paying your mortgage, contact your mortgage lender and ask for the loss mitigation department. You should also contact a HUD-approved counseling agency for assistance. It’s free.
Be careful. Signing over the deed to your home may not prevent foreclosure. You are still responsible for paying your mortgage even if you sign over the deed to your home. A legitimate housing counselor would never pressure you to sign a document before you had a chance to read and understand it.
They may be scam artists posing as legitimate organizations approved by, or affiliated with, the government. Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure. You can also work with a local HUD-approved counseling agency to determine what programs you may be eligible for. And, remember, you do not have to pay to benefit from government-backed loan modification programs.
You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.