Don’t Be a Victim of Foreclosure Fraud, FTC Warns

by Marianne Sorensen

Two companies have been ordered by the U.S. District Court for the District of New Jersey to stop falsely advertising that they are part of a government-endorsed mortgage assistance network and that they successfully modify mortgages for almost all of their clients or else give refunds. According to the Federal Trade Commission, these companies, New Hope Modifications and Hope Now Modifications, are not affiliated with the legitimate HOPE NOW Alliance mortgage assistance network. They often take a full month’s mortgage payment as a fee from distressed homeowners, fail to help them modify their mortgages, and then deny them refunds.

Be Alert to the Signs of a Scam

If you’re having trouble paying your mortgage or you have gotten a foreclosure notice, contact your lender. Don’t fall for “rescue” scams being perpetrated on homeowners desperate for an easy fix to their problems.  Avoid dealing with any company or person that:

  • guarantees to stop the foreclosure process – no matter what your circumstances
  • instructs you not to contact your lender, lawyer, or credit or housing counselor
  • collects a fee before providing you with any services
  • accepts payment only by cashier’s check or wire transfer
  • encourages you to lease your home so you can buy it back over time
  • tells you to make your mortgage payments directly to it, rather than your lender
  • tells you to transfer your property deed or title to it
  • offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale
  • offers to fill out paperwork for you
  • pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.

Report Fraud

If you think you’ve been a victim of foreclosure fraud, contact:

Federal Trade Commission
Your state Attorney General
Your local Better Business Bureau

For More Information

To learn more about mortgages and other credit-related issues, visithttp://www.ftc.gov/credit and MyMoney.gov, the U.S. government’s portal to financial education.

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