I found this on the Consumer Financial Protections Website. As a member
of the Loan Lawyers Team, I am proud to say this article deals specifically
with what we fight against, daily (source:
Consumer advisory: Don't fall for a foreclosure relief scam or bogus
Along with other cases from federal and state partners, today we charged that
mortgage rescue scammers have taken $25 million in illegal advance fees
from consumers. It serves as a reminder of how important it is to watch out for scam
artists trying to take advantage of people who need help avoiding foreclosure.
Federal law bans law firms—except under very limited circumstances—from
requesting or receiving payment from you for help obtaining foreclosure
relief, such as a mortgage modification, before you've signed a mortgage
modification agreement with your lender.
In one case, we allege that two companies and their principals offering
legal services took in over $19.2 million in fees from over 10,000 distressed
homeowners nationwide, with most, if not all, of that money coming from
illegal advance fees for so-called loan modification services.
There are red flags that a company claiming to offer legal foreclosure
relief help may not be worth your money. Watch for the following warning
signs and ask more questions:
Demands for payment upfront. If a lawyer or someone claiming to offer legal help wants to be paid first—before
you receive a modification—they may be breaking the law. A licensed
lawyer can ask you to pay first but only if the lawyer is licensed in
the state where you live or where your house is located. Even a licensed
lawyer in your state can only receive up-front payments if they meet other
requirements about what they charge for, how they deposit the money, and
if they comply with all other state laws and regulations.
Any claim that a modification is guaranteed.Your mortgage company must agree before you can get a modification. A lawyer
or someone claiming to offer legal help cannot guarantee you will get
a loan modification.
A hard sell. Most licensed lawyers do not call or e-mail you directly and push you
hard to pay money right away. If someone claiming to be a lawyer calls
you on the phone and asks you to sign papers or pay them right away, ask
some more questions to be sure it's not a scam. Here's a
guide to help you determine if it's real legal help or a foreclosure scam.
Third party authorization
When it comes to actually getting help with foreclosure relief, your mortgage
company may require you to authorize a third party to act on your behalf,
so it's important to know what this means for you.
Only authorize a third party that is trustworthy and be careful about exactly
what you're authorizing them to do.
What servicers can do
Foreclosure relief scams are costly for consumers and also impact servicers
and investors in the mortgage industry. We're posting a new
model third party authorization form that was developed as part of loan modification scam prevention efforts
by representatives from government agencies as well as consumer advocacy
groups, housing counselors, and the mortgage industry. The form may be
useful for mortgage servicers who can choose to use the form in whole,
or in part, by adapting other existing forms. The new model form provides
additional questions that will help mortgage servicers build on existing
privacy and fraud controls by collecting information that will make it
easier for servicers to spot red flags of a foreclosure rescue scam.
For help on navigating through all of the above and getting real help on
foreclosure relief call me today at 1(888) FIGHT-13 (344-4813) and ask