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Beware of mortgage settlement scams

by Tanisha Warner on
3/26/2012
in Housing and Homeownership , Consumer Protection

While the landmark $25 billion National Mortgage Settlement was just announced last month, scammers have wasted no time capitalizing on the vulnerability of desperate homeowners.

The settlement with the nation’s five largest mortgage servicers was signed by federal and state officials Feb. 9, and will provide assistance for homeowners in order to compensate for the faulty foreclosure practices offered by mortgage servicers following the housing market crash. Although real compensation is still months away, there have already been numerous reports of scam operations popping up across the country.

While the government has been cracking down on foreclosure scams, it is important for you to remain diligent in keeping your personal information safe. The following are some tips to help you identify and avoid falling victim to a foreclosure scam.

  • Don’t panic. Mortgage scams are effective because the scammer is able to exploit the fear of a person who is in a desperate, vulnerable state. Don’t let fear cause you to make irrational decisions.
  • Never act under pressure. Don’t sign a contract or disclose information before doing your research. You can always request to receive any information in writing.
  • Trust your gut. If someone is offering you something that sounds too good to be true, it probably is.
  • Stay informed. Make sure you obtain detailed information about your foreclosure deadlines. If you want to know if you qualify under the Settlement, contact your bank or loan servicer directly.
  • Don’t release any personal financial information. If you are contacted by someone who claims to be from your financial institution and wants you to “confirm” or help them identify your personal account information, it is likely a scam. Rather than releasing information, ask for their contact information and tell them you’re going to call them back.
  • There is no fee involved in the National Mortgage Settlement. If you are contacted in any way from someone asking for money in return for a speedy settlement payment, they are scamming you.

For more information about mortgage assistance relief scams, visit FTC.gov. If you have questions or concerns about your mortgage loan, consider meeting with a HUD-certified housing counselor to discuss your options.

Tanisha (Warner) Smith is a former communications manager at MMI.

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