Fake Loan Modifications Trick Homeowners into Paying Fees and Even Signing Over Property to a Criminal Operation
Your BBB® is receiving an increased number of calls from homeowners contacted by entities claiming to be mortgage servicers. People are calling and mailing homeowners, pretending to be their mortgage company, offering fake loan modifications and “trial payment plans” to lower mortgage payments. They may send genuine-looking letters with the logo of the homeowner’s mortgage company, the homeowner’s account number, and deceptive contact information that routes homeowners to criminals instead of their mortgage servicer. They may also trick caller IDs to show the number of your mortgage company. Homeowners are told that their loans may be permanently modified if they make three trial period payments and follow certain other requirements. Homeowners are usually instructed to send payments via wire transfer or money order to bogus addresses claiming to be their mortgage company, only to later discover that they have been sending payments to criminals and have lost thousands of dollars while their real mortgage company has not received any payment.
Other common mortgage modification scams include:
- Charging upfront fees for mortgage modification services and then providing little or no assistance;
- Falsely guaranteeing or implying that modification applications will be approved (often through falsely claiming affiliation with HAMP, other government programs, or mortgage servicers);
- Tricking homeowners into transferring part or all of their property interests to a criminal, usually in an effort to drain equity from a property.