Loan Modification Fraud Targets Military
Military homeowners looking for mortgage relief are falling victim to a new scam.
A new scheme targets troops who have sought mortgage assistance from HAMP -- the Home Affordable Modification Program.
J.J. Montanaro, a CERTIFIED FINANCIAL PLANNER™ practitioner with USAA, says military culture requires servicemembers to keep their finances sound. If a mortgage becomes difficult to pay, military homeowners may be more susceptible to scammers promising to fix it all quickly.
Be on the lookout for loan modification services that are actually a well-disguised scam. Many falsely claim connections with well-known government agencies or non-profits. Confirm affiliations by contacting the government agency or nonprofit yourself.
Also, if the service claims a very high success rate, or makes guarantees, be wary. Modification approval is based on your specific financial situation which must be well-documented and validated with stringent underwriting rules. The process can't be easily skewed to guarantee an approval. In most cases, it's illegal for a company to charge in advance for loan modification services, and beware of money-back guarantees, too. If a service tells you to stop making mortgage payments, tries to convince you to make payments directly to them, or tells you not to contact your mortgage provider, it's likely a scam.
Active-duty servicemembers or veterans can get free help and info from the U.S. Department of Veterans Affairs.