Loan modification scams dominate listener calls


For the first time ever, more than half of all calls to our Consumer Action Center have been about a single family of topics: Loan modifications, foreclosures and shortsales. In short, what to do when you’re underwater in your home and about to drown!

In the midst of the desperation and the unbelievable incompetence of the banks handling these requests, scores of criminals have come into the marketplace offering phony loan modification services.

The Orlando Sentinel reports the state of Florida is going after these phonies for violation of a new anti-fraud law called the the Foreclosure Rescue Fraud Prevention Act. But this scenario can take place in any state. Beware specifically of those freeway exit signs or ads on the web promising foreclosure relief. The truth is they’re looking to take advantage of you.

So what should you do? Check our foreclosure guide for links to legitimate housing counseling and more advice about what to expect.

Remember these simple rules of thumb to protect yourself:

* Never pay a fee in exchange for a counseling service or modification of a delinquent loan.
* Never sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
* Never make a mortgage payment to anyone other than your mortgage company without their approval.

See our foreclosure guide for further information.

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