California homeowners need to be on the lookout for scammers offering to alter and decrease their mortgage payments, according to the California Department of Justice, which has received numerous complaints from homeowners and mortgage servicers expressing concern about fraudulent mortgage loan modifications.
How does it work? Masquerading as mortgage servicers or representatives from the Home Affordable Modification Program (HAMP), these scammers call and mail homeowners to offer fake loan modifications and trial payment plans that promise to lower mortgage payments. They also send realistic letters that contain the logo of the homeowner’s mortgage company and account number, as well as misleading contact information that routes homeowners directly to them rather than their mortgage servicers. Scammers even call from telephone numbers that appear on caller ID as the homeowner’s mortgage company.
As with legitimate HAMP offers, homeowners are told that their loans may be permanently modified if they make three trial payments and follow certain other requirements. Homeowners usually are told to send payments via a wire transfer or money order to fake addresses that supposedly belong to their mortgage company. Unfortunately, they later discover that they have been sending payments to scammers and have lost thousands of dollars, while their real mortgage company has received no payments at all.
Kamala D. Harris, the state’s attorney general, also is warning homeowners to be wary of these additional loan-modification scams:
• Charging homeowners illegal fees upfront for mortgage-modification services and then offering little or no assistance
• Falsely guaranteeing or implying that modification applications will be approved (often through claiming affiliation with HAMP, other government programs or mortgage servicers)
• Tricking homeowners into transferring part or all of their property interests to a scammer, usually to drain equity from a property.
