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Warning Signs of Scams
Just as there are several types of scams, there are also several warning signs. These includes a homeowner being told that they've been "pre-selected" for mortgage or foreclosure services, a company or individual claiming unrealistic success rates, and a company or individual saying that no one else can help.
- Read the end of the Consumer Advisory from the Office of the Comptroller of the Currency for ten warning signs of foreclosure rescue scams.
- The Neighbor Works America Loan Scam Alert website also offers six warning signs of foreclosure rescue scam How to Spot Scams
- Warning signs of foreclosure rescue scams from the Federal Trade Commission's "Money Matters" website.
Tips to Avoid Scams
Knowing about the different types of foreclosure and mortgage scams and being able to recognize their warning signs is the first step in protecting yourself. There are also a few simple concepts that can help keep you from falling into a trap: Don't pay when FREE help is available; Don't respond to unsolicited mailings, calls, or visitors; and Read the fine print of any deal.
Don't hesitate to follow your instincts. If you feel that you have been approached by a potential scam, but you aren't quite sure, do a little research before you commit to anything. A simple Internet search for the name of the individual or company should bring up any complaints posted by other consumers. Reading these complaints can help you determine if the offer to help is legitimate or a scam.
Always remember that you can contact a government-approved housing counseling agency and get quality assistance for free. For more information about finding a housing counselor, click here.
- From the Federal Trade Commission, tips for homeowners on how to avoid foreclosure rescue scams.
- From the Federal Reserve Board, five tips for avoiding foreclosure scams.
There are Many Types of Scams
Unfortunately, there are several types of foreclosure and mortgage scams. In order to be successful, these scams are made to look as legitimate and appealing as possible, so it is extremely important to be familiar with the types of scams in order to recognize and avoid them.
- Read the beginning of the Consumer Advisory from the Office of the Comptroller of the Currency for descriptions of the most common types of foreclosure rescue scams.
- Neighbor Works America's "Loan Modification Scam Alert" website also offers descriptions of some of the most common scams.
- This article from the Federal Trade Commission provides descriptions of how common foreclosure scams work.
- This article from the Federal Trade Commission describes the newest kind of foreclosure scam - phony forensics loan audits.
When a homeowner begins falling behind on mortgage payments and is facing
foreclosure, it is a matter of public record. Unfortunately, this means that personal
information can be found and used by unscrupulous businesses and individuals
who want to take advantage of distressed homeowners. Con artists will approach
homeowners in person, by mail, over the phone, or through email. They also often
advertise their services on television, radio, websites, and in newspapers,
describing themselves as "foreclosure consultants" or "mortgage consultants" and
offering "foreclosure prevention" or "foreclosure rescue" services.
If someone offers to negotiate a loan modification, or to stop or delay a foreclosure for a fee, carefully check their credentials, reputation, and professional experience.
Mortgage lenders and servicers can help consumers find real options to avoid foreclosure. However, it is important that the consumer contact their mortgage lender early to preserve all of their options. There are legitimate consumer financial counseling agencies that help consumers work with their lenders. To find one, click here.
Foreclosure Avoidance and Mortgage Modification Scams
Reporting Potential Scams
The best way to avoid mortgage modification and foreclosure scams is for them to be eliminated entirely. There are many agencies working to identify, investigate, and shut-down foreclosure and mortgage scam operations, and they need the public's help. If you believe you have been approached by a scam artist or are aware of a potential scam through any type of advertising, be sure to save all paperwork and/or contact information that you receive, document conversations, and report the suspicious activity immediately. By reporting potential scams, you will be helping protect your neighbors from losing their money and their homes. You'll be keeping our communities strong and safe.
- Scams can always be reported to a housing counselor. For more information about finding a legitimate housing counseling agency, please click here.
- To report a scam specifically in Wisconsin, you can call the Metropolitan Milwaukee Fair Housing Council at (414) 278-1240
- If your concern or complaint is about a national bank, and you can't resolve it directly with the bank, you can file a complaint with the OCC's Customer Assistance Group by calling (800) 613-6743, sending email to firstname.lastname@example.org, or by clicking here: File a Bank Complaint
For a list of other methods for reporting mortgage modification and foreclosure avoidance scams, please click here to visit Loan Scam Alert's "How to Report Scams"
125 E Seminary St, Richland Center, WI 53581 Phone: (608) 647-4949 Fax: (608) 647-8293 Office Hours: Mon - Fri, 8:30 AM to 5:00 PM
Check out Esteemed Lending Services, a website created by the Federal Trade Commission to help teach consumers how to recognize scams.