BBB warns of mortgage relief scams

Working for Better Business Bureau, I have learned to stay calm while listening to consumers’ complaints and to keep a professional distance. However, every so often, I still hear something that makes my blood boil.

Recently, I spoke with a woman who was facing foreclosure, and her story broke my heart.

Her husband had fallen ill, and the couple was trying to survive on his Social Security payments alone. She couldn’t afford the payment on their mortgage, and her attempts to secure a loan modification had hit a roadblock with the bank.

She saw an ad on television for a company promising to help her obtain a loan modification, and she thought her prayers had been answered. However, after she scraped together more than $1,000, representatives from the company seemed to disappear. No one answered her calls. No one returned her messages.

Now, she is left with no money and a mortgage she can’t pay. The bank is threatening to foreclose in December, and there’s nothing I can do to help her.

People around the country are falling for scammers and disreputable companies promising to help modify or refinance a mortgage to stave off foreclosure. The victims pay their last dime in a Hail Mary attempt to keep their homes, but end up in a worse position than when they started.

Chris Schneider, a spokesman for the Texas Department of Savings and Mortgage Lending, said if consumers have been unable to reach a settlement with their bank, there are reputable services that can help. He advised consumers to check the company’s license before agreeing to any terms and avoid paying an advanced fee for services.

In addition, BBB offers the following tips:

  • Talk to your lender. Before paying an outside company to negotiate with your mortgage provider, try to get some relief yourself for free. Many companies will work with a consumer to avoid foreclosure.
  • Use a licensed company. Any business offering loan modification services must be licensed. Search the agent or company name in the National Mortgage Licensing System to ensure you are not dealing with a scammer.
  • Know where to turn. If you feel your mortgage provider is treating you unfairly, file a complaint with the Texas Department of Savings and Mortgage Lending online or by phone at 1-877-276-5550.
  • Start with trust. Check out the company’s BBB Business Review at bbb.org to see its BBB rating, complaint history and more.

Have you experienced any issues with your mortgage company? Share your stories with us!

-Amy

 

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