As the housing market continues to put more pressure on homeowners, many are finding themselves more vulnerable to scams than they might ordinarily be. Unfortunately, a group of young men in California recently took advantage of this vulnerability with a loan modification scam.
How It Works
The men of Mission Viejo, California sent out letters offering loan modification options to homeowners all over California, using CitiFinancial or CitiMortgage letterhead.
The scammers asked homeowners to send amounts between $3,500 and $4,600 to a bank account as payment for loan modification services. It was advertised in these letters that once the payment was received, CitiFiancial or CitiMortgage would then be able to offer a low interest rate of 2.8 percent or less.
For many homeowners suffering under an overbearing mortgage, refinancing at that rate may seem like a much-needed break. However, when they heard nothing back after depositing into a personal account, many of the victims turned to the Better Business Bureau and local law enforcement agencies.
In order to continue with his scam, the scammers would change the address, name, and contact information of the fake businesses. However, they were eventually caught.
Be wary about any kind of solicited loan modification offers you receive. If the offer appears to be from a reputable financial institution, always cross check the offer and information by contacting the bank or lending institution directly. You can prevent yourself from becoming a victim by implementing even the smallest amount of vigilance!