It is common for people who are facing foreclosure to receive solicitations from mortgage loan companies offering assistance with helping to save their homes. In many cases, these offers are fraudulent. There are ways to identify and avoid loan modification scams about which people should be aware.
How Loan Modification Scams Work
Most solicitations that are sent from scam loan modification companies are designed to look like they are official. Scammers do this by choosing company names that sound as if the company is affiliated with the government or a law firm. In some instances, the materials will use acronyms such as HAMP or the names of federal programs like the Making Home Affordable initiative in order to entice people to contact the company. Once people do, the primary goal of the company is to convince people to sign up for its services. A company representative will tell callers that they will negotiate on their behalf with the servicer or lender to modify the loans for a fee. These scam artists target homeowners who are desperate, and the representative will often say anything in order to make the sale.
Common statements made by sales representatives of scam loan modification companies include the following: