Foreclosure Scams and what they may look or sound like

Phony Counseling or Foreclosure Rescue Scams

The Scam Artist poses as a counselor and tells you he can negotiate a deal with your lender to modify your loan or save your house – if you pay him a fee first. This factor, the upfront fee, is a red flag. HUD-approved housing counseling agencies offer help with foreclosure for free. The fee may be called a processing or administrative fee. The scammer may even tell you not to contact your lender, lawyer, or housing counselor – that he will handle all the details. He may even insist that you make all mortgage payments directly to him while he negotiates with your lender. Once you pay the fee or a few mortgage payments, the scammer disappears with your money.

Fake “Government” Modification Program

Some scammers may claim to be affiliated with, or approved by, the government, or they may ask you to pay high, up-front fees to “qualify” for government mortgage modification programs. The scammer’s company name and website may sound like a real government agency, but the website may end with .com or .net instead of .gov. You may also see terms like “federal,” “HAMP,” “MHA,” “HARP” or other words related to official U.S. government programs. Contact your lender first. Your lender will be able to tell you if you qualify for any government programs to prevent foreclosure or modify your loans ANDyou don’t have to pay to benefit from these programs!

Forensic Loan Audit

The scammer, who may call himself a forensic loan auditor or mortgage loan auditor, offers to review your mortgage loan documents to determine whether your lender complied with state and federal mortgage lending laws. The scammer will usually require that you pay a fee to start the process. The scammer may say that you can use the audit report to avoid foreclosure, accelerate your loan modification process, reduce your loan principal, or even cancel your loans.


The scam artist convinces you to sign documents for a “new loan modification” that will make your existing mortgage current. THIS IS A TRICK!!! You actually just signed documents that surrender the title or deed of your house to the scam artist in return for a “rescue” loan.

ACCC’s HUD-approved housing counseling agency offers HECM (reverse mortgage) counseling nationally and foreclosure counseling to Massachusetts residents. If you are seeking debt relief via housing counseling, contact ACCC here.

Learn more about loan modification scam variations.