Scam of the day – July 29, 2014 – Government takes action against mortgage relief scams

The Federal Trade Commission, Consumer Financial Protection Bureau as well as attorneys general from fifteen states have started legal actions against more than 40 law firms and companies including the Utah based Danielson Law Group, FMC Counseling Services and California based Mortgage Relief Advocates that are alleged to have falsely promised distressed homeowners that they could lower their mortgage payments and interest rates as well as stop foreclosures.  In violation of the law these companies and law firms collected advance fees for services not yet performed and in most cases were never performed.  These fees ranged up to $6,000 for initial fees with additional monthly fees for which the consumers received little or nothing.


A telltale signs of a mortgage relief scams is the demand for an upfront fee before services are rendered.  The FTC’s Mortgage Relief Services Rule bans advance fees until you have actually received an offer of relief from your lender and you have accepted that offer.  Mortgage scammers also often tell you to stop paying your mortgage and not to communicate with your lender.  This is bad advice when you have a problem with your  mortgage.  Failing to make payments can make it worse and not communicating with your lender if you are having a problem paying your mortgage will only make the problem worse.  Finally, don’t trust any company that guarantees that they can get you a mortgage payment reduction and never transfer title to your home to anyone saying they are trying to help you.  That is another sure sign of a scam.

If you do find yourself having difficulty making your mortgage payment, either speak with your lender directly to see if you can get a modification or call a legitimate credit counselor through the Homeownership Preservation Foundation which is a non-profit company that provides free help to modify your mortgage and avoid foreclosure.  You can reach them at 1-888-995-HOPE.

Scam of the day – June 27, 2014 – Student loan scams

For many college students, graduation day is the culmination of years of hard work.  It is a day to look back and see all that they have accomplished.  However, it is also a time to look forward to a future of paying off expensive student loans.  Most government and private students loans give students a six month grace period before they have to start repaying the loans, however once loan repayments begin, it can be a crushing burden for many new graduates.  Scam artists, the only criminals whom we refer to as artists, see new graduates as new victims as they contact them with a number of different loan scams that all share one important aspect.  The graduate gets no debt relief and loses money to the scammer in the process.  The most prevalent student loan scam is a loan consolidation scam by which the scammer tells the graduate that he can consolidate numerous student loans into one loan that is more affordable.  Usually, they require an advance fee before they start the process.  The fee goes by many different names including processing fee, administrative fee and consolidation fee, however, whatever you call it, it is a scam.  Legitimate lenders do not charge advance fees so if you are approached by someone who offers to assist with consolidating or finding you a lower interest loan and they ask for an advance fee, it is a scam.


Federal student loans can be consolidated by you at no cost by going to the Federal Student Aid website  For other assistance you can go to the Federal Student Aid website that deals with federal student loan servicing at  For private loans, you should go directly to your lender for assistance.  Don’t waste money on “help” that will only cost you more money.