December 6, 2010
The Department of Housing and Urban Development and the FHA investigate claims of discriminatory lending practices and policies that violate the Fair Housing Act, but these agencies also warn consumers about an equally vexing problem. Foreclosure scams have always plagued the housing market, but since the housing crisis in 2008 there is greater opportunity for scammers to prey on unsuspecting homeowners trying to avoid losing their investment.
The first thing the FHA wants consumers to know about foreclosure avoidance, Obama mortgage information, and counseling services is that help is free. HUD and the FHA warn borrowers that fee-based counseling service is one of the first warning signs. The same applies to those who require a fee in exchange for loan modification–the FHA and HUD both say “beware” in such cases.
High-pressure tactics are commonly used in scams, especially against those anxious to save their homes and avoid being foreclosed upon. Never give in to pressure to “sign now”, and never agree to a proposal that involves the borrower signing over the deed to the home to someone else until you have contacted HUD or the FHA for further guidance.
Chances are the terms of such a deal is NOT friendly to the borrower. In cases like these, call HUD or the FHA to ask for help. Are you mistaking the terms of a legitimate agreement for those of a scam? Or is there an actual scam in progress? Get advice from the source.
One reason for this caveat comes from the Making Home Affordable official site, which advises, “…do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.”
In some legitimate instances the mortgage company may ask you to sign over the deed–but you shouldn’t allow a third party to convince you to do so, nor should the borrower ever make a mortgage payment to anyone other than the mortgage company without their express approval.
Again, the FHA and HUD are the experts–when in doubt, contact them for counseling and foreclosure avoidance advice.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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