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Fraud Security for Loans

Beware of Loan Scams

We have all heard the ads about stopping foreclosure or getting help with your mortgage payments but do we really know if these companies or their claims are legitimate? Fraudsters like to prey on people’s emotions and take advantage of someone in need.  They will use phrases like “Stop foreclosure now!” or “We have special relationships with banks to speed up your approval process.” to get your attention then try to get your money. You can prevent fraud and scams simply by knowing about the different types of scams.


Phony Loan/Credit Counseling

The scam artists will claim they can work with your lender to reduce your mortgage payments or save your home from foreclosure for a small fee.   The scam artist may pose as an attorney or a representative from a law firm. They may tell you not to contact your lender they will handle all the correspondence on you pay them their fee, and then stop returning your calls. Or they may insist you make your mortgage payment to them and after a few months of payments they are unreachable.


Forensic Audit

Fraudsters offer a service to have an auditor or attorney review your loan documents to detect if your lender complied with the law in exchange for a fee. They claim you can use their audit report to avoid foreclosure, help the loan modification process, reduce how much you owe, or even cancel your loan.


Rent-to-Buy Schemes

In this scam you are deceived into signing over the deed to your home to a scam artist that says you will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible or the rent significantly increases, you are evicted and the “rescuer” walks off with most or all of the equity from your home plus any rent you paid.



Scam artists offer to help and claim you need to sign paperwork to bring your mortgage current, but hidden in the stack of papers is a document that surrenders the title of your house to the scammers in exchange for a "rescue" loan.


Warning Signs

If you're looking for a loan modification or other help to save your home, avoid any business that:

  • Guarantees to get you a loan modification or stop the foreclosure process – no matter what your circumstances.
  • Tells you not to contact your lender or lawyer.
  • Claims that all or most of its customers get loan modifications or mortgage relief.
  • Asks for an upfront 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 them, rather than your lender.
  • Tells you to transfer your property deed or title to them.
  • Offers to buy your house for cash for much lower than the selling price of similar houses in your neighborhood.
  • Pressures you to sign papers you haven't had a chance to read thoroughly or that you don't understand.

If you're having trouble paying your mortgage or have gotten a foreclosure notice, contact your lender immediately.


Content for this page was provided by the Federal Trade Commission.