Did you know that state and federal laws prohibit people from charging you for help with foreclosure prevention, or with lowering your interest rate? Collecting your money first, before help is provided, is illegal and a scam.
PREDATORY LENDING & MORTGAGE RESCUE SCAMS
Predatory lenders often target homeowners with financial challenges and who might not be award of options. They will try to take advantage of your circumstances with tactics that convince you to take a loan that will make your financial problems worse and increase the risk of losing your home. They will often offer loans with:
- Higher interest rates than the rates for which you may qualify
- Excessive loan fees
- Unnecessary costs like prepaid life insurance
- Terms that will make it very difficult or impossible for you to repay the loan
Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their home. While all homeowners are vulnerable to these scams, scam artists tend to target people of color, the elderly and those with limited English.
“Rescue” scams come in many forms – this handout from the Metropolitan Milwaukee Fair Housing Council lists common scams, tips to avoid them and resources.
AVOID COMMON SCAMS
- Beware of anyone who asks you to pay a fee in exchange for lowering your interest rate or modifying other terms of your mortgage, or for other help with foreclosure prevention.
- Never make a mortgage payment to anyone other than your mortgage company without the mortgage company’s approval. And beware of anyone who tells you to stop communicating with your mortgage company.
- Beware of anyone who guarantees their help. While organizations who provide this service have experience, there is never a guarantee that foreclosure mediation will work.
- Beware of people who pressure you to sign papers immediately or who try to convince you that they can “save” your home if you sign or transfer over the deed to your house.
To report a suspected rescue scam and investigate whether you can get your money back, notify the Metropolitan Milwaukee Fair Housing Council at 414-278-1240. There is no charge for the Fair Housing Council’s help.