Many people fall behind on their mortgage payments as a result of the COVID-19 pandemic. Mortgage relief scams are taking advantage of many people.
You should be wary of mortgage relief schemes if you are behind on your payments. Free foreclosure assistance is available to everyone. Anyone who attempts to charge you upfront fees for helping or guarantees that they can stop your foreclosure is not legitimate.
Here are some red flags that can help homeowners like you spot and avoid mortgage relief scams:
- Individuals or a company ask you to pay upfront for help.
- The company guarantees you they will have the terms of your mortgage changed or loan modification.
- The company guarantees you will not lose your home.
- Someone instructs you to send your payment to someone other than your mortgage lender or servicer.
- Someone tells you to stop paying your mortgage or that you don’t have to continue to pay your mortgage.
- The company states they are affiliated with the government or uses a logo that looks like a government seal but is slightly different.
If you see one of these warning signs, take your business elsewhere. The CFPB (Consumer Financial Protection Bureau) has information on how you can avoid foreclosure and tips for working with your mortgage servicer.
The bottom line is understanding your rights under the CARES Act and guidance from the US Department of Housing and Urban Development (HUD) can also help you avoid mortgage scams. Suppose you are experiencing financial hardship resulting from the COVID-19 pandemic. In that case, you may be able to temporarily suspend or reduce your monthly mortgage payments through a forbearance agreement. Take note, those who service mortgages may be barred from foreclosing on your home.
For more information on COVID-19 housing protections and important deadlines, visit consumerfinance.gov/housing.
What if you have already become a victim of a scam or are mid-process? I will cover some recommendations in our next blog post.