Underwater Home Owners New Target of Scammers

Scammers are targeting home owners who’ve seen the value of their residence drop, which is prompting the Consumer Financial Protection Bureau to issue new warnings to underwater borrowers about widespread mortgage-modification scams.

Scammers try to dupe home owners by claiming to be affiliated with government agencies or programs. They make promises to obtain a mortgage modification on behalf of the underwater home owner. They will charge up-front fees for their service and usually instruct the home owner to stop paying their mortgage and not to contact their lender.

“It is absolutely unacceptable for unscrupulous con artists to take advantage of our nation’s housing crisis by targeting home owners looking for help from the Troubled Asset Relief Program’s Home Affordable Modification Program,” says Christy Romero, special inspector general for TARP.

Home owners should beware of anyone contacting them pretending to be from a government program — such as the Home Affordable Refinance Program or the Home Affordable Modification Program — who try to charge them for a service. Government programs like HARP and HAMP do not charge for services related to counseling, refinancing, or modifying loans.

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