As I have described numerous times in various “Scam of the day” pieces, which can be accessed in the Scamicide archives, loan modification scams have proven to be fertile ground for scammers and identity thieves seeking to take advantage of people who have found themselves behind in the their mortgage payments and are seeking assistance in keeping their homes. A few days ago the Lawyers Committee for Civil Rights Under Law filed its 14th class action lawsuit Baker et al. v. Platinum Law Group, et al. against scammers preying upon distressed homeowners facing possible foreclosures. Victims are lured to these scam artists, the only criminals we refer to as artists, by claims that the scammer can get the victim’s bank to lower its interest rates and monthly payments. In return, often the homeowner is required to pay an advance fee of as much as $3,700, which the scammer offers to refund if they are unsuccessful. These scammers are unsuccessful, but they do not refund the money and the unfortunate homeowner is left holding the bag.
There are a number of telltale signs that a loan modification company’s offer of help is a scam. First and foremost of these signs is if the company requires a payment in advance of successful services. This is illegal under federal law so if the company proposing to assist you in a mortgage loan modification insists on a payment before services are provided, you can be confident that the offer of help is a scams. Another indication that the company’s offer may be a scam is when the company insists on being paid by a wire transfer, which is the primary way scammers prefer to be paid because it is all but impossible to get this money back. Other indicators that the offer to help is a scam include telling you that you should not speak with your bank, that you you should stop paying your mortgage to the bank, but pay it to the company offering to help you and one of the most common scams, when they tell you to convey the title to your home to them so that you can lease it from them and then buy it back from them later.