What is a Mortgage Payment Relief Scam?

A mortgage payment relief scam is a fraudulent scheme that promises to help homeowners who are struggling to make their mortgage payments. Scammers may claim to be able to get you a loan modification, negotiate with your lender, or even buy your home outright. However, these promises are often false, and the scammers will simply take your money and disappear.

How do mortgage payment relief scams work?

Mortgage payment relief scams typically work in one of two ways:

• Upfront fees: Scammers will often ask for upfront fees in exchange for their services. These fees can be hundreds or even thousands of dollars, and they are often non-refundable. Once they have your money, the scammers will simply disappear.
• Delayed payments: Scammers may also tell you that you can stop making your mortgage payments while they work on getting you a loan modification or other relief. However, this is a dangerous proposition. If you stop making your mortgage payments, your loan will go into default, and you could lose your home.

What are the red flags of a mortgage payment relief scam?

There are a number of red flags that you should be aware of if you are considering using a mortgage payment relief company. These include:

• The company is not licensed or regulated. You should always check to make sure that the company you are considering using is licensed and regulated by the state.
• The company makes unrealistic promises. If a company promises to get you a loan modification or other relief that seems too good to be true, it probably is.
• The company asks for upfront fees. Legitimate mortgage payment relief companies do not typically ask for upfront fees.
• The company pressures you to act quickly. Scammers often pressure you to sign paperwork or make payments without giving you time to read the terms or ask questions.

If you think you have been the victim of a mortgage payment relief scam, there are a few things you can do:

• File a complaint with the Federal Trade Commission (FTC). You can file a complaint online or by calling 1–877-FTC-HELP.
• Contact your state attorney general’s office. Your state attorney general’s office may be able to help you recover your money.
• Contact your lender. If you have stopped making your mortgage payments, contact your lender as soon as possible. They may be able to work with you to come up with a payment plan.

Mortgage payment relief scams can be very costly, both financially and emotionally. By being aware of the red flags and taking steps to protect yourself, you can help avoid becoming a victim.

See Scam and Fraud Protection for 2023 for more information and make sure to Sign Up for our Scam Prevention Newsletter.