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Loan Modification Fraud Targets Military

Mortgage refinance

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.

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USAA, a diversified financial services organization, is the leading provider of competitively priced financial planning, insurance, investments, and banking products to members of the U.S. military and their eligible families. Rated among the highest among financial services companies for customer advocacy in a Forrester Research survey, USAA provides convenient and accessible financial products to its more than 9 million members. For more information about USAA, or to learn more about membership, visit usaa.com

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