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Topic 5:
Beware of Scams – Don’t be a Victim

Topic 5: Beware of Scams – Don’t be a Victim
• Warning Signs
• How Scams Work
• Common Foreclosure Scams
• How to Protect Yourself From Scams

Don’t be a Victim!

The possibility of losing your home to foreclosure can be terrifying. The reality that scam artists are
preying on the vulnerability of desperate homeowners is equally frightening. Many so-called foreclosure
“rescue” companies claim they can help you save your home. Unfortunately, foreclosure fraudsters can
take your money, ruin your credit, and wipe out any equity you may have in your home.

Your mortgage servicer – or any HUD-approved housing counseling agency – can help you find real
options to avoid foreclosure at no cost. If someone offers to negotiate with your servicer or offers to
arrange to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and
experience.

Loan modification companies are similar to foreclosure “rescue” firms. Many aggressively target
struggling borrowers. The Washington State Department of Financial Institutions requires the licensing of
loan modification companies. Additionally, individuals providing loan modification services must be
licensed as loan originators.

Loan modification offers can look legitimate. Some even replicate government agency websites use
forged letterheads resembling those used by your servicer or use forms that resemble the governmental
modification programs. Anyone guaranteeing results or charging upfront fees to “save your home”
should be suspect. Call your servicer directly, using the phone number on your mortgage statement, and
seek free counseling help from a HUD-certified financial counselor. The Washington State Department of
Financial Institutions keeps a database of all licensed loan modification companies. Verify the license of
anyone before working with them!

WARNING SIGNS

If you are looking for foreclosure prevention help, beware of any business that:
• contacts you without you having contacted them first
• requires you to pay a fee before providing you with any services
January 2020 | Page 54