The Treasury Department, the Consumer Financial Protection Bureau (CFPB)
and the Special Inspector General for the Troubled Asset Relief Program
(SIGTARP) have announced the creation of a task force to address mortgage
modification scams. Mortgage modification scams target home owners who
are seeking assistance with the often byzantine process of obtaining a
The CFPB has issued a Consumer Fraud Alert that includes some tips for
recognizing and avoiding mortgage modification scams. In particular, be
on the lookout for communications from companies that act like they are
associated with HAMP or the Federal government. There is a consumer hotline
that you can call to verify whether a company is legitimately associated
with the government. The Homeowner's HOPE
TM Hotline can be reached at 1-888-995-HOPE.
It is also important to note that if a company asks for money up front
to help you obtain a
loan modification, it may very well be a scam. In Illinois, only an attorney can ask for
cash up front for loan modification assistance. Even then, only pay if
you are receiving comprehensive legal services, not just a loan modification.
Paying someone to assist you with the HAMP process does not guarantee
a greater or lesser chance of success in obtaining a modification.
As a final caution, beware of anyone who advises you to default on your
mortgage. Being in default is not required to obtain a
HAMP modification, and defaulting on your mortgage can expose you to a foreclosure lawsuit.
If you choose to stop paying, make sure you are aware of the consequences.