As the number of people needing foreclosure help remains constant, so too do the number of scams seeking to take advantage of those homeowners. In a press release issued on December 1, 2011, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of the Treasury announced the creation of a joint task force to combat scams targeted at homeowners seeking to apply for the Home Affordable Modification Program (HAMP).
“The goal of our consumer fraud alert is to empower homeowners with the knowledge of how to recognize and avoid these scams,” Christy Romero, Deputy Special Inspector General for SIGTARP, said in the release. “These scams prey upon the most vulnerable homeowners as they desperately hold out hope of saving their homes. SIGTARP, the CFPB, and Treasury want to make sure that homeowners know a scam when they see one and know where to turn for help.”
The release told homeowners to keep the following tips in mind:
- Homeowners can apply to the federal Home Affordable Modification Program (HAMP) on their own or with free help from a housing counselor approved by the U.S. Department of Housing and Urban Development (HUD). Applying to the program is always free.
- Since only a mortgage servicer has discretion to grant a loan modification, no third party can guarantee or pre-approve your HAMP mortgage modification application.
- Anybody seeking to charge you in advance for mortgage modification services should be a red flag, as in most cases, charging fees in advance for a mortgage modification is illegal.
- Paying a third party to assist with your HAMP application will not improve your likelihood of receiving a mortgage modification. Thus, the release warns homeowners to beware of individuals or companies that ask you for payment and tout success rates or claim to be “experts” in HAMP.
- The release also advises homeowners to authenticate individuals or companies claiming to be affiliated with HAMP or displaying a seal or logo representing the U.S. government in correspondence or on the Web.
- Beware of individuals or companies offering money-back guarantees, as well as individuals or companies advising you to stop making mortgage payments or not to contact your mortgage servicer.
Homeowners who have been unable to modify their mortgages should know that a Chapter 13 or Chapter 7 bankruptcy process could also help them keep their house as well as eliminate bills and stop foreclosure. Have you tried applying for HAMP? What was your experience like?
Law Firm of Kevin D. Judd – Washington DC bankruptcy attorney