Beware of Mortgage Scams: #5 – Relief Scam

Protecting yourself from mortgage scams is important. Becoming an informed homebuyer is the best way to protect yourself.  In this last of a 5-part series in mortgage scams, buyers are cautioned to beware of scams and understand the risks when entering the home buying market.

#5 –Relief Scam;

With so many homebuyers finding themselves in financial straits, the government spent some time constructing legislation to assist homebuyers needing assistance to keep their home.  With these laws and assistance programs comes confusion by the public of what is in effect and available to them.

With confusion comes an opportunity for scammers to take advantage of homeowners and homebuyers who are trying to buy, refinance, or keep their homes.  The “relief scam” entails a person representing themselves to the homeowner as representatives from a company that will help those in need of financial assistance for refinancing their home.  They want to keep their home and relieve the stress of their financial troubles.

The scammer entices the homeowner with a program that, for a small fee, will allow them to not have to deal with the harassing calls of their mortgage company and get them back in good standing. The homeowner pays the scammer a fee to join the “program” and then they are advised of their monthly payment (that they work out with the homeowners as “doable”) and then advice the homeowner to ignore calls and letters from the mortgage company because they are “working” with them.

However, typically, the scammer collects the monthly fees for a short amount of time all the while not paying ANYTHING to the mortgage company. Meanwhile, the foreclosure process has proceeded and the homeowner is oblivious until it is too late. Once the homeowner realizes that there is a problem, the representative they were working with is nowhere to be found.

Read about more scams in our ‘Beware of Mortgage Scams’ series.