Foreclosure Rescue Scams: Don’t be Taken by Phony Audits

Mortgage modificationsThe Federal Trade Commission calls it the latest twist in increasing foreclosure prevention scams: forensic auditors backed by attorneys who claim they can find laws your lender violated to get you off the hook.
“The ‘auditors’ say you can use the audit report to avoid foreclosure, accelerate the loan modification process, reduce your loan principal, or even cancel your loan,” the FTC said.
It is a scam, particularly when they ask for an upfront fee – the biggest warning flag of any consumer financial service, the agency said.
According to the FTC and law enforcement: 

  • There is no evidence that forensic loan audits will help you get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.
  • Some federal laws allow you to sue your lender based on errors in your loan documents. But even if you sue and win, your lender is not required to modify your loan simply to make your payments more affordable.
  • If you cancel your loan, you will lose your home and you will have to return the money you borrowed to your lender.

The FTC has created a webpage on mortgage loan audit scams.

3 thoughts on “Foreclosure Rescue Scams: Don’t be Taken by Phony Audits

  • May 9, 2010 at 8:12 pm

    Just want to say whoever wrote this article did not do their due diligence in their research.There are thouasands of lawsuits being filed everyday against banks for predatory lending practices that were discovered thru forensic audits. As far as stating there is no evidence of this helping distessed
    home owners these guys must be living under a rock.You can go on the internet and find class action lawsuits against the banks.This just another ploy by bank lobbyists to hide the bilking of billions of dollars from the American

  • May 11, 2010 at 7:54 pm

    Home owner’s who want to keep their home have 3 options if they are struggling to make their mortgage payment or their home is upside down in value 120% or more…
    1. Do nothing. Pay what you always pay and get what you always get.
    2. Loan Modification- Lower your monthly payment 25-50% reduction of monthly payment possible today, all arrearages can be forgiven and the loan reinstated without having to come up with back payments.
    3. Principal Reduction Program- True Short Refinance where you keep your home, stay on title, get a new Lender and new loan at 90% of today’s LTV.

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