A pocket guide to avoiding mortgage modification scams

Mortgage loan modification. You need it. You want it. You have to have it. You're determined to get it. You're out on the street if you don't!

And, in case you haven't figured this out yet on your own, by the time you even start thinking the things mentioned in the paragraph above, a host of people in your community -- and even outside -- already know that you are in deep housing trouble. The wrong kinds of people. The kinds of people more than willing to reach their hands into your already-empty pocket and try to suck up even the dust left from the last few coins you once carried there.

These are the mortgage modification scam artists and we know there are plenty of them because criminal cases all across the country have been escalating these past several months, such as mentioned in an earlier post by Amy Pyle.

So, with this in mind, it is probably a good time to review, courtesy of the U.S. Department of the Treasury (and if they don't know a thing or two about picking your pockets, then who the hell does,right?) a few warning signs of a mortgage modification scam.

You can click on the provided link -- like here -- to go directly to the site of the Comptroller of the Currency for a fuller explanation of how these various scams actually work. But for now, hold on as we zip through the ten warning signs (a little like a David Letterman bit, only serious!):

1. Beware of "counselors" who insist you hand over money to them upfront for their services. While some perfectly legit types may charge a token fee, if the tab comes to thousands of dollars, run for the hills. Better still, drive there.


2. The dude who tells you something like, "Hey, no problem saving your home! I guarantee it!" is trouble with a giant "T". No one can make such a promise except a fool, or a crook. Guess which one you would be talking to?


3. If someone tells you to sign over your home to them and they will then pay your mortgage and rent your own house back to you, be afraid. Be very afraid. Not only are you more than likely about to be scammed, but, guess what? Even if you do sign over your home, YOU are still responsible to the lender to pay the mortgage back. Bummer!!! But true.


4. A sort of variation on this one is the con person who instructs you to just simply stop paying your mortgage, that someone else will do it for you. Yeah, and do you want to buy a bridge from the guy? I'm sure it can be arranged.


5. Let's say your new found "friend" tells you, "hey, if your lender calls, don't talk to the bum," or words to that effect. That's just looking for trouble. In fact, says the government, the first person you should be talking to is your lender.


6. My absolute favorite scam goes like this: the scam dude tells you, with a straight face, "Your lender never had the legal authority to make a loan." Love that one. Of course it is total bull. But apparently people do fall for it. Don't!


7. Look out for the classic "sign now, we'll fill in the blanks later" scam. AMAZING anyone would still fall for this one. But hey, people get desperate and do desperate things. Don't sign anything you can't read fully first.


8. This is the one where you're instructed to dial a special number or maybe go to a special website that has a government- sounding name....like 1-800-Fed-Loan. Careful, warns the federal government. Could be a scam. And it is really important to keep in mind that a legit government program will never ask for a fee up front.


9. Watch out for the crook who files for bankruptcy in your name and doesn't tell you about it...They do it to temporarily stop the foreclosure so you believe they are actually doing something to help you. Guess again.


10. High pressure tactics...that's a simple one. The real deal doesn't badger you with all sorts of horrible scenarios.

So, there you have it: The ten warning signs of a possible mortgage modification scam.

Happy New Year!