Ebook Legislative Solutions For Preventing Loan Modification And Foreclosure Rescue Fraud
Homeowners facing foreclosure have always been vulnerable to scammers, conartists, and thieves. When property values were appreciating rapidly, foreclosure rescue scams primarily focused on obtaining title to the home and robbing homeowners of their equity. Today with property prices depreciating and many homes already “underwater,” equity is no longer the game.
Instead, rescuers have become high-volume, “loan modification specialists.” The pitch by this new breed of predators is that, for a fee, which can reach several thousand dollars, they will negotiate a loan modification for a financially distressed borrower. The hitch is that the “work” performed, if any, leads nowhere, with the homeowner out money and time and closer than ever to foreclosure.
These loan modification companies are flourishing because mortgage loan servicers cannot or will not provide borrowers with timely and consistent information regarding their requests for loan modifications. Frustrated by the lack of responsiveness on the part of the servicers, borrowers across the country are giving loan modification companies their precious dollars with disastrous consequences.
The most important work that Congress can do to prevent these scams is address
the servicing problems that drive homeowners to scammers, support legitimate loan modification efforts, and expand funding for existing federal enforcement efforts. In addition, though many states have laws to address foreclosure rescue scams, Congress could adopt a strong national floor to protect homeowners in all states.
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