In times of crisis, it is inspiring to see individuals and organizations of all types reaching out to help those in need. Unfortunately, it is equally troubling to be reminded of the lengths some people will go to try to take advantage of those who are looking for help. I’m referring to specifically to mortgage modification scammers, who are in the business of duping struggling homeowners with fraudulent promises of financial assistance with refinancing mortgages.
The scammers prey on homeowners who are in danger of defaulting, by using official-sounding names to make folks think they are taking advantage of President Obama’s promise to refinance or modify 7 to 9 million mortgages. Companies advertising these services are often fraudulent, going so far as to try to mimic the actual mortgage lender in mailings they send to homeowners who are at risk of defaulting. Anyone using their services is at risk of losing their savings or their homes.
The good news is that the government seems committed to cracking down on these scammers. They have sent warning letters to 71 companies who were running suspicious advertisements, and are currently investigating 2100 mortgage fraud cases. “We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar,” says Treasury Secretary Timothy Geitner. Here’s hoping the government’s active stance against these scammers shuts down or discourages fraudulent companies. Until then, let’s extend our own helping hand by warning friends, families, and neighbors about the risk, and make sure no one we know is taken advantage of by these ruthless frauds.