As Americans continue to struggle with economic difficulties, more and more folks find themselves in real danger of losing their home. It’s natural that people in such a situation would look for information and assistance wherever they can find it. Unfortunately, scammers realize this and are finding new ways to prey on vulnerable homeowners.

According to the Financial Crimes Enforcement Network (a bureau of the US Department of Treasury), instances of mortgage modification and foreclosure rescue fraud have increased dramatically in the last year. The scams are usually perpetrated by scammers professing to be modification or foreclosure “specialists” and generally fall in one of two categories:

Quit-Claims

When a grantor signs a quit-claim deed, he or she renounces any interest in a piece of property. These deeds are perfectly legal, often used in cases of divorce, sale of property or the passing of property to the next generation. In instances of fraud, however, the owner of the home is persuaded to sign a quit-claim deed. Owners sign, believing this will release them from their mortgage repayment obligations, perhaps in exchange for the right to remain in their homes as renters. Sometime thereafter, the owners, who no longer have a legal right to remain in their own homes, are evicted. The scammers have sold the house, but the original mortgage is still unpaid and the responsibility of the evicted owners.

Foreclosure Rescue

In foreclosure rescue scams, the scammers claim to be loan-modification specialists, perhaps even  affiliated with the distressed homeowner’s lenders. They require a substantial upfront payment for loan modification assistance, then do nothing. Under the Obama Administration’s Making Home Affordable Program, loan modification counseling with a Housing and Urban Development (HUD)-approved housing counselor is free, so no homeowner should work with a counselor who demands pay for his or her services.

If you’re concerned about your ability to pay your mortgage, seek help from a reliable source that can offer genuine assistance. You can find a HUD-approved counselor on the Making Home Affordable website or by calling 888-995-4673. If your mortgage is with GHCU, call our Member Solutions Department at 800-562-5515 (206-298-9394 locally). You don’t have to struggle with possible foreclosure on your own. There’s help.

Filed under: Ask Salal CU, Financial News and You, Money management tips by admin