PEMBROKE PARK, Fla. – Concerns over mortgage relief scams have flooded the Local 10 News Call Christina hotline, so the Call Christina team has compiled information on how consumers can smoothly take on the loan modification process.
The Federal Trade Commission says mortgage relief scammers will falsely claim that they can negotiate with consumers' mortgage services to receive a loan modification - or other relief to avoid foreclosure - for a hefty upfront fee. An illegitimate company will sometimes pretend to have access to special government assistance programs and often guarantee the success of its services.
In 2010 the FTC issued the Mortgage Assistance Relief Services (“MARS”) Rule to combat these scams. Under the MARS Rule mortgage relief providers are prohibited from collecting fees until they have produced a loan modification or other relief for a consumer. It also forbids providers from slanting material aspects of their services and requires that they provide all key information to consumers.
The MARS Rule exempts lawyers from having to follow these restrictions, Jason Weaver, a consumer protection attorney, said.
"When you see that a company has a lawyer or that it looks like a law firm, unfortunately that's not the end of the inquiry," Weaver said. "Because it could just be a company that's scamming people but using an attorney to front the company."
Weaver advises consumers to watch out for red flags such as:
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Strange schemes involving transfers of a property's title or deed
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Claims of access to special government services
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Never meeting with the lawyer
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Asking to stop communication with lender or servicer
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Inconsistent website and document information
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Companies or law firms that claim to practice nationally or in multiple states
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Guarantees or unreasonable “save your home” promises
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Expensive up-front fees
"Stay away from any unreasonable promises," Weaver said. "Anybody who promises that they are absolutely going to guarantee they can do something for you is probably going to scam you and take your money. Most legitimate attorneys will be very honest with you. And say 'you've got a good chance, but I can't guarantee anything. It's going to be tough and here's why.' They're going to give you real world expectations. Anybody who's selling you and telling you a guarantee is lying to you."
Keep in mind that a bad result doesn't necessarily mean that you were scammed.
Weaver said consumers also want to ask if they do loan modifications and defense in court.
"You shouldn't be discouraged from hiring an attorney just because these scams are out there," Weaver said. "As a matter of fact it is always better to hire an attorney than not hire an attorney. Don't let that discourage you."
The FTC can help consumers find tips on payment and loan modifications. Some other resources to find legitimate mortgage help :
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Contact your lender or loan servicer to find out what your payment options are as early as possible.
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Get a referral from the local bar association : Miami , Broward and Palm Beach
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Florida HUD Office for help in finding a legitimate housing counseling agency nearby
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Homeownership Preservation Foundation 888-995-HOPE for a loan modification and preventing foreclosure
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Consider giving up the home without foreclosure by selling the house or contacting the IRS to conduct a short sale or deed in lieu of foreclosure
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Contact the National Association of Consumer Advocates (NACA) to access their national database of attorneys that work with consumers
- Call Christina team member Sara Girard contributed to this story