I like these tips, published this week by the Office of the Comptroller of the Currency.
Remember that in Florida upfront fees for loan modifications are illegal -- unless you are consulting with an attorney. Other "mortgage rescue" companies can't charge you beforehand.
Here are some excerpts from the OCC press release
If you’re falling behind on your mortgage, others may know it, too — including con artists. They know that people in these situations are vulnerable and often desperate. Potential victims are easy to find: mortgage lenders publish notices before foreclosing on homes.
If someone offers to negotiate a loan modification for you or to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and experience, watch out for warning signs of a scheme, and always maintain personal contact with your lender and mortgage servicer. Your mortgage lender can help you find real options to avoid foreclosure. It is important to contact your mortgage lender early to preserve all your options. There are legitimate consumer financial counseling agencies that can help you work with your lender.
Common Types of Schemes
Foreclosure “rescue” and refinance fraud. The con artist offers to act as an intermediary between you and your lender to negotiate a repayment plan or loan modification and may even “guarantee” to save your home from foreclosure. You may be told to make mortgage payments to the schemer directly — along with significant, up-front fees — and be told that your payments will be forwarded to your lender. In reality, the con artist may pocket your money and leave you in worse shape on your loan. The person also may tell you to stop making payments or stop communicating with your lender. Don’t follow that advice.
Remember that your mortgage lender should be the starting point for finding options to avoid foreclosure. You also should consider contacting qualified and approved credit counselors.
Fake “government” modification programs. Unscrupulous people may claim to be affiliated with, or approved by, the government or may ask you to pay high up-front fees to qualify for government mortgage modification programs. While government-supported mortgage modification and refinancing initiatives are legitimate, the con artists’ claims are not.
Keep in mind that you do not have to pay to benefit from these government programs. All you need to do is contact your lender or loan servicer.
The con artist’s name or Web site may be very similar to those of government agencies. The schemer may use such terms as “federal,” “TARP,” or other words or acronyms related to official U.S. government programs.
Leaseback/rent-to-buy schemes. In this type of scheme, you are asked to transfer the title to your home to the con artist, who will, supposedly, obtain new and better financing and/or allow you to remain in the home as a renter and eventually buy it back. If you do not comply with the terms of the rent-to-buy agreement, you will lose your money and face eviction. The agreement may be very hard to comply with, because it may require, for instance, high up-front and monthly payments that you may not be able to afford.
In fact, the con artists may have no intention of ever selling the home back to you. They simply want your home and your money.
Remember that transferring your title does not change your payment obligations — you will still owe your mortgage debt. The difference will be that you will no longer own your home.
If payments are not made on the mortgage, your lender has the right to foreclose, and the foreclosure and any other problems will appear on your credit report.
Bankruptcy schemes. You may have heard that filing bankruptcy will stop a foreclosure. This is true — but only temporarily. Filing bankruptcy brings an “automatic stay” into effect that stops any collection and foreclosure while the bankruptcy court administers the case.
Eventually, you must start paying your mortgage lender, or the lender will be able to foreclose. Bankruptcy is rarely, if ever, a permanent solution to prevent foreclosure.
In addition, bankruptcy will negatively impact your credit score and will remain on your credit report for 10 years.
Debt-elimination schemes. Con artists may claim to be able to “eliminate” your debt by making illegitimate legal arguments that you are not obligated to pay back your mortgage. These schemers will provide you with inaccurate claims about applicable laws and finance, such as that “secret laws” can be used to eliminate debt or that banks do not have the authority to lend money.
Do not stop making payments on your mortgage based on their claims.
Resources for protecting yourself:
Report suspicious activity to relevant federal agencies, such as the Federal Trade Commission, and to your state and local consumer protection agencies. Reporting con artists and suspicious schemes helps prevent others from becoming victims. If your complaint or question involves a national bank and you cannot resolve it directly with the bank, contact the OCC’s Customer Assistance Group by calling (800) 613-6743, by sending an e-mail to customer.assistance@occ.treas.gov, or by visiting www.HelpWithMyBank.gov.
Contact a legitimate housing or financial counselor to help you work through your problems.
To find a counselor, contact the U.S. Department of Housing and Urban Development (HUD) at (800) 569-4287 or (877) 483-1515, or go to www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm.
Call (888) 995-HOPE, the Homeowner’s HOPE Hotline to reach a nonprofit, HUD-approved counselor through HOPE NOW, a cooperative effort of mortgage counselors and lenders to assist homeowners.
Visit NeighborWorks America’s Web site at www.nw.org/network/home.asp.
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Harriet Johnson Brackey, the personal finance writer for the Sun-Sentinel, has been an award-winning business...
