SCAM AWARENESSMortgage relief scams
A mortgage relief scam targets homeowners who are behind on payments or worried about foreclosure. A company promises to lower your payment, save your home, or negotiate with your lender, but only if you pay upfront. Many take the money and do little or nothing, and some even take the home itself.
How this scam works
The scammer may find you through public foreclosure records, mailers, ads, or calls. They may claim ties to a government program or say they have a special relationship with your lender. They often say it is a "guaranteed" fix and ask for a large fee before they start any work.
Some tell you to stop talking to your lender and send your mortgage payments to them instead, then keep the money while your loan falls further behind. Others ask you to sign papers you don't understand, which may transfer the deed to your home. Federal rules generally bar mortgage relief companies from charging fees before you have a written offer from your lender that you accept.
What it can look like
EXAMPLE · NOT A REAL MESSAGE"We've reviewed your file and you qualify for a government-backed loan modification. We can stop your foreclosure this month. Just pay the $1,500 processing fee today and send your mortgage payments to us while we negotiate with your lender."
Warning signs
- The company wants money before doing any work.
- They guarantee to stop foreclosure or lower your payment.
- They tell you to stop contacting your lender.
- They ask you to send mortgage payments to them instead of your lender.
- They pressure you to sign papers quickly or sign over your deed.
- They claim to be part of a government program.
How to protect yourself
- Call your mortgage servicer directly using the number on your statement.
- Get free help from a HUD-approved housing counselor.
- Never pay upfront fees for mortgage help.
- Never sign over your deed or sign papers you don't fully understand.
- Keep making payments to your lender unless your lender tells you otherwise in writing.
- Ask a lawyer you choose or a housing counselor to review any agreement.
If you already responded
- Call your mortgage servicer immediately to confirm your loan status and any missed payments.
- Stop sending payments to the company and contact your bank about any recent charges.
- If you signed papers about your deed, contact a lawyer or legal aid office right away.
- Contact a HUD-approved housing counselor for free help with your real options.
- Report the company to the FTC and the Consumer Financial Protection Bureau.
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Where to report it
Common questions
Is it legal for a company to charge upfront for mortgage relief?
Under federal rules, most companies that sell mortgage relief services cannot collect fees until you have a written offer from your lender and you accept it. A company asking for money before it delivers results is a major red flag. Free help is available from HUD-approved housing counselors.
Where can I get free help with my mortgage?
Start by calling your mortgage servicer using the number on your statement and asking about options. You can also contact a HUD-approved housing counselor, often at no cost. The Consumer Financial Protection Bureau has a search tool on its website to help you find an approved counselor near you.
Should I ever send my mortgage payment to someone other than my lender?
No, unless your lender or servicer tells you in writing that your loan has a new servicer. Scammers often tell homeowners to pay them while they "negotiate," then keep the money. If anyone tells you to stop paying your lender or stop talking to it, that's a warning sign.