Homeowners Should Beware of Mortgage Modification Scams, Warns C.A.R.

Homeowners Should Beware of Mortgage Modification Scams, Warns C.A.R.

The California Association of REALTORS® (C.A.R.) is distributing a public service announcement (PSA) to television and radio stations across California to warn consumers that they are at risk from scammers who offer phony mortgage modification schemes to troubled borrowers.

“We are encouraging every TV and radio station in California to air this important public service announcement,” said C.A.R. President LeFrancis Arnold. “Every week, we hear reports of unscrupulous con artists who have taken advantage of unknowing, financially troubled home owners. In most cases, charging upfront fees or payments for a mortgage modification is not just a rip-off. It’s illegal.”

Especially in this down economy, con artists use many different tactics to prey upon home owners, making the stressful situation of facing foreclosure even more difficult. For example, home owners that fall victim to these scams are promised loan modifications and reduced monthly payments in exchange for upfront fees paid to third party operators, which is illegal. Moreover, there’s no need for these services. Working with third party operators may not improve a home owner’s chance of payment modification. Furthermore, certain advice that may be provided by these third parties, like stopping mortgage payments, can be extremely detrimental to working with the home owner’s mortgage servicer.

According to the Federal Trade Commission, these scammers review foreclosure notices in newspapers, the Internet, and public files to identify potential victims. Ads that scammers place online, on television, and in newspapers claiming to “Stop foreclosure now” and offering “money back guarantees” are suspect and should be reviewed cautiously by the home owner.

C.A.R. wants home owners to protect themselves this holiday season by visiting car.org for tips to avoid mortgage modification scams.