MEMPHIS, TN (WMC) - Federal rules prohibit anyone from collecting fees for refinancing, loan modifications or mortgage assistance unless a lender has actually issued a written offer of mortgage relief to a consumer -- and the consumer has officially accepted it.
Still, mortgage relief scams run rampant and right over struggling homeowners every day. According to the Federal Trade Commission, these are the most common mortgage relief scams:
* PHONY HELP/COUNSELING. The scammer claims for an upfront fee, he'll negotiate a deal with your lender to either refinance your loan or bail you out. He may even claim to be a lawyer, and he'll tell you not to contact your lender -- "Let me handle it." He's not a lawyer. He's not contacting your lender. But now he has your money.
* THE "FORENSIC AUDIT." Another scam with the dead giveaway of an upfront fee, the "forensic audit" scam is when someone requests a fee to have a mortgage auditor of foreclosure prevention auditor review your loan to make sure your lender isn't breaking the law. The truth is there is no expert, and the person collecting the fee has no authority to either arrange a loan modification or rescue you from foreclosure.
* RENT-TO-BUY SCHEMES. A phony "landlord" lures you into a lease-purchase agreement on a home he may or may not actually own, deceiving you into thinking your rent will eventually add up to a down payment on the house. When the time comes for the purchase, he either evicts you or disappears with your money as the real owner of the property shows up, wondering who YOU are and why you are occupying the property.
* BAIT-AND-SWITCH. The scam artist gives you papers to sign to either get another loan or modify your current one. Buried inside those papers: a document that turns over the property deed or title to the scammer.
Click here for the FTC's complete alert on mortgage relief scams and how to find legitimate help.