Four Common Types of Mortgage Modification Scams

Posted on in Debt Relief

Illinois bankruptcy attorneyFalling behind in your loan or even being late on a few payments on your mortgage could put you at serious risk for foreclosure. Unfortunately, this is a common problem for many people, and there are scam artists out there looking to take advantage of your situation. While there may be alternatives to bankruptcy in terms of saving your home, it is important to be aware of the following mortgage schemes.

Mortgage Modification Scams Victimize Homeowners

Honest, hardworking people who are vulnerable due to outstanding debts are a frequent target for scam artists looking to make a quick profit. According to Consumerist, those who prey on people facing foreclosure are among the worst offenders.

Mortgage modification scammers often claim to be representatives of community non-profit groups or government agencies. They play on your fears and promise to help relieve your financial burdens, but their lies and scheme can cause you to lose your home, in addition to wiping out any additional resources you possess. The Federal Trade Commission (FTC) warns consumers to be alert for the following scams, which are among the most commonly used by these criminals:

  1. Phoney Counseling and ‘Phantom’ Help: Scammers offer to help negotiate a lower interest rate and mortgage payment with your lender in exchange for their fees. Unfortunately, most never intend to fulfill their end of the bargain. Once they get your money, they no longer return your calls and are almost impossible to track down.
  2. Mortgage Auditors: These scammers charge a fee to look at your mortgage documentation for errors of law that could save you money and prevent the bank from foreclosing on your home. While very legitimate sounding companies claim these services work, the FTC advises that in most cases, consumers end up getting nothing in return for their payments.
  3. Rent To Buy Scheme: In this scam, con artists offer to buy your home then sell it back to you through a rent to own program. They often claim this can help you get a better credit rating while avoiding potential foreclosure. Sadly, the terms they offer are usually so unreasonable that the original owner defaults on the contract, giving the scammers the rights to the home.
  4. Bait and Switch: With all of the paperwork involved in buying or refinancing a home, it is easy to sign documents without being entirely sure what they contain. Scammers take advantage of this in bait and switch schemes. They claim to be able to renegotiate your mortgage or lower your interest rate, presenting you with a stack of paperwork to sign. Within these documents, there is often a form surrendering your property, allowing them to take possession.

Reach Out to Us Today for Help

When you are having trouble meeting your mortgage obligations, you can trust a passionate Tinley Park debt relief attorney at our office to help weed out scammers, while offering legitimate ways for saving your home. Call or contact the Law Offices of Eric G. Zelazny online today and request a free consultation to discuss your available options.




20 North Clark Street, Suite 800
Chicago, Illinois 60602
18400 Maple Creek Drive, Suite 500
Tinley Park, Illinois 60477