In today’s tough economy, it can take just one blow to cripple a homeowner’s ability to pay their mortgage. The loss of a job, a health issue, or any number of other life events has the potential to seriously hinder the ability of even a fairly well-off homeowner to make regular mortgage payments. Many homeowners faced with such difficulties turn to mortgage modification programs or other renegotiation strategies in the effort to avoid foreclosure. Unfortunately, companies with loose scruples have sprung up with scam programs to take advantage of those in need.
How to Spot Scams
A typical scam involves a company offering to act as an intermediary between the homeowner and the lender, negotiating mortgage modification terms and reaching a mutually beneficial arrangement – for a fee, of course. Many of these scammers will simply sit back and collect your payments, offering soothing words but doing nothing at all on your behalf, then walking away with your money and leaving you worse off than before.
Another prevalent scam involves companies claiming to offer government-subsidized refinancing. These companies use names similar to government entities or that give the illusion of being affiliated with the government; in reality they have nothing to do with the helpful government entities that exist for the benefit of the troubled homeowner, and are only too eager to take your money and leave you in still deeper debt, unable to avoid foreclosure.
The best course of action is for a homeowner to consult only with housing counselors who have been approved by the U.S. Department of Housing and Urban Development.