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Common mortgage modification scams to watch out for

On Behalf of | Aug 13, 2021 | Real Estate Law

Owning your own home is the American dream for many. It is your castle. It’s where you live and where you raise your children. But with as much pride and joy that comes with owning your home, particularly for first-time home owners, there are also pitfalls to beware of.

Mortgage modification scams

Mortgage modification scams are nothing more, or less, than schemes to take your money. They will attempt to take advantage of you while you are vulnerable by making promises that cannot be kept.

The federal HAMP program was created in 2009 to help struggling homeowners avoid foreclosure. However, it was ended in 2017. If anyone claims they can offer you a modification under the HAMP program, be immediately suspicious.

Scammers often tip their hands by how they deal with money. They may seek fees in advance of a mortgage modification, which is illegal in most cases. They may offer money-back guarantees or tell you they can only accept cash or a cashier’s check. Or they can offer you cash for your home, but well below the market value. Each of these can be a sign that the person or business is not trustworthy.

Watch out for those who say they’re from your mortgage company but then demand that payment be sent to a different address. Similarly, scammers may tell you to stop paying your mortgage or cease all contact with your mortgage company.

Scammers will attempt to pressure you into making rash decisions – don’t sign anything until you’ve had a chance to review it thoroughly. And never sign over the deed to your home unless you are certain the decision is sound and the company receiving the deed is reputable.