Avoid mortgage loan modification scams

March 26, 2022

Millions of homeowners struggled to make their mortgage payments during the COVID-19 pandemic, and it’s important for all homeowners to know about mortgage loan modification scams and how to avoid them.

The Consumer Financial Protection Bureau wants to make people aware that mortgage loan modification scams are schemes to take people’s money – often by making a false promise of saving them from foreclosure. These so-called foreclosure or mortgage consultants often use public notices or lists of distressed borrowers purchased from private companies to find their targets. They may offer to "prevent" foreclosures or "rescue" desperate homeowners from foreclosure through advertising, email or phone calls, or in person.

Examples of scams related to mortgage modification and foreclosure prevention include, among others:

In foreclosure rescue and refinance fraud, scam artists offer to act as intermediaries between homeowners and lenders to negotiate repayment plans or loan modifications. They may even "guarantee" to save a home from foreclosure. They tell a person to make mortgage payments directly to them so they can forward payments to the lender. Instead, they may pocket that money and leave the individual in worse shape on a loan.

Scam artists create fake "government" modification program websites that mimic federal websites and use business names like those used by government agencies. They may use "federal," "TARP" or other words, acronyms and abbreviations associated with official government programs. These tactics are designed to fool people into thinking they are approved by, or affiliated with, the federal government.

In leaseback and rent-to-buy schemes, con artists entice people to transfer their home title to them with promises of new and better financing. They say people can rent their home and eventually buy it back. But, if they do not comply with the terms of the so-called terms “rent-to-buy agreement,” people can lose their money and their home. Scammers have no intention of selling a home back to people. They want their home and money.

Scammers may:

  • Ask people to pay fees upfront to receive services
  • Promise to get people loan modification
  • Ask people to sign over the title to their property
  • Ask people to sign papers that they do not understand
  • Say people should start making payments to someone other than their servicer or lender
  • Tell people to stop making mortgage loan payments altogether

Anyone who believes they have been contacted by a scammer or believes they have been the victim of a mortgage scam should report the scam to the Federal Trade Commission, or to the Delaware Attorney General. Stop paying the scammer. People can also seek help from an attorney.

There are options for those who can’t pay their mortgage or are worried about missing a mortgage payment. The first thing people should do is call their mortgage servicer and learn the steps to take, relief options and places to go to get help with their mortgage.

For more help, reach out to HUD-approved housing counselors. The U.S. Department of Housing and Urban Development-approved housing counselors can discuss options with people if they are having trouble paying their mortgage loan or reverse mortgage loan. This may also include forbearance or a modified payment program.

People who think they may have been a victim of a mortgage loan modification scam may also want to consult an attorney. There may be resources to assist people through the local bar association or legal aid, or for service members, their local legal assistance offices. People can contact the Delaware Attorney General’s office for more information about state protections as well as file a complaint.

To learn more, go to the Consumer Financial Protection Bureau website at


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