Keep Your Clients Safe from Mortgage Relief Scams

April 23, 2012

The Federal Trade Commission is warning home owners to beware of a growing number of mortgage relief scams that are preying on struggling home owners with fake promises of saving them from foreclosure, modifying their mortgage, or restoring their poor credit. 

Many of the most recent scams being reported claim to be from law firms. A new report showed that scammers posing as lawyers has caused a 60 percent spike in mortgage scam complaints, finds the Homeownership Preservation Foundation, a nonprofit group that helps distressed home owners. Many of the scams are targeted at fake promises to help home owners qualify for some of the new federal relief home owner programs, like HARP or HAMP.

Home owners should always check credentials first, an article in The New York Times advises. Home owners can find a list of licensed lawyers through the state’s bar associations (find your start bar association at the National Organization of Bar Counsel Web site).

The New York Times article also says home owners can prevent becoming victims of such scams by being wary of any programs that require a big upfront fee. Several programs to help struggling home owners are available for free from nonprofit groups certified by the Department of Housing and Urban Development.

And, the article notes, watch out for programs that “guarantee” relief.

“Legitimate lawyers don’t make guarantees, just like doctors don’t,” Colleen Hernandez, the chief executive of the Homeownership Preservation Foundation, told The New York Times.

Source: “Avoiding Mortgage Relief Scams,” The New York Times (April 19, 2012)

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