A Description for Mortgage Foreclosure Relief and Debt Management Fraud

When people get behind on their mortgage payments and are afraid of losing their houses, they can fall prey to con artists who profess to help. The COVID-19 pandemic has given con artists even more clout to prey on anxious homeowners by making false promises to help them pay off their debts and avoid foreclosure.

Scammers who specialize in mortgage relief look for victims in various methods. Online ads, posters fastened to telephone poles, and brochures slid under doors are all used by some to market legal or financial counseling services. Others look through local government property files or newspaper notices to find homeowners facing foreclosure. To suggest ties to reputable lenders, nonprofit groups, or the government-chartered mortgage giants Fannie Mae and Freddie Mac, they’ll utilize logos, letterheads, or “spoof” caller ID numbers.

Once they’ve contacted, the scam artists will promise to negotiate with a mortgage lender for a fee to lower or postpone payments and avoid foreclosure. They may try to persuade you to make home payments directly to them while they work out the kinks, or they may advise you to cease making payments altogether in the hopes of getting a better deal from your lender or the loan servicer in charge of your account. They’ll “promise” results or refund your money, sometimes citing a special relationship with banks that they’ll exploit on your behalf.

The Federal Trade Commission (FTC) advises that once they’ve stolen as much as they think they can get away with, they’ll cease receiving calls and simply vanish.

Scammers are courting house borrowers even more active now that the coronavirus is causing widespread economic misery, according to the Federal Housing Finance Agency (FHFA). Be careful of calls, emails, and texts claiming to be able to utilize the pandemic to decrease or postpone your mortgage payments. Genuine lenders and loan servicers provide borrowers hardship programs; contact yours to see what it can do to assist you.

Scammers who offer mortgage relief should be avoided. Signs to Look Out For

• Regardless of your financial circumstances, a mortgage relief agency ensures that it can prevent foreclosure or get your loan amended.
• For assistance in renegotiating your loan, the organization asks a fee upfront. The federal Mortgage Assistance Relief Services (MARS) Rule makes this illegal.
• It’s advised that you don’t contact your mortgage lender or servicer, a housing counselor, or your own lawyer.
• The term “government-approved” refers to a loan modification that has been promised. Scammers frequently pose as representatives of government institutions.

Do’s

• If you’re having difficulties making mortgage payments, talk to your lender about alternatives for changing your loan or repayment schedule.
• Check out an attorney who claims to be able to help you with your mortgage. To see if there is a record of previous concerns, contact your state bar organization or look it up on the internet.
• Avoid relief companies that do not have the federally required information. The MARS Rule mandates, among other things, that companies disclose to prospective clients that they are not affiliated with the government or the customer’s lender and that they explain the risks of missing mortgage payments.
• Consider seeking free or low-cost assistance from a nonprofit credit or housing counselor if you’re having difficulties paying your mortgage. The US Department of Housing and Urban Development (HUD) maintains an online database of housing counseling agencies that the government has approved.

Don’ts

• Unsolicited calls, texts, or emails from mortgage relief companies should be ignored.
• No fees should be paid in advance. A mortgage help company can’t legally take money from you unless it has a written agreement with your lender or loan servicer.
• Do not commit to paying your mortgage to anyone other than the financial institution that holds your loan.
• Don’t follow a relief company’s advice and stop making mortgage payments. You run the risk of losing your home and ruining your credit.
• Don’t sign documents that you haven’t read thoroughly, that you don’t fully comprehend, or that include blank lines or spaces.
• Don’t give someone the title to your home.

Four more techniques to help homeowners avoid foreclosure are as follows:

1. Answer or positive defense are both acceptable options. According to the Castle Group, an answer means the homeowner admits, denies, or has no knowledge of the foreclosure defense charges. An affirmative defense acknowledges the cause of the failure but absolves the defendant of all or part of the liability due to reasonable reasons. An affirmative defense is a strategy for battling the lender and forcing them to prove specific facts at trial.
2. Make a bankruptcy filing. You can declare your home an “unsecured asset” in a Chapter 7 filing and wait for the lender to protest. The lender now bears the burden of proof in demonstrating a proper chain of assignment. You can file an Adversary Proceeding in a Chapter 13 bankruptcy. This implies you file a lawsuit against your lender to force it to furnish proper proof of claim. Your lender must submit proof of “perfected title” under the Bankruptcy Code.
3. Ascertain that the bank is a genuinely interested party. If it isn’t, it has no legal authority to foreclose. If your loan has been securitized, for example, your original lender has already been compensated. The debt should be regarded as settled at that point. It is recommended that you conduct a securitization audit to verify that your original lender profited from the securitization of your mortgage. A third-party researcher completes the audit by tracking down your loan and providing you with a court-admissible document proving that your loan has been securitized.
4. Demonstrate that the promissory note is no longer valid. Once a loan has been securitized or converted to stock, a foreclosure defense can argue that it is no longer a loan and cannot be changed back into one. That is to say; your promissory note is no longer valid. If this is the case, your mortgage or deed of trust is no longer secure. Instead of the bank asserting that you have broken the promissory note’s contract, the foreclosure defense claims that the bank has destroyed that contract. And how can the agreement be enforced if it doesn’t exist?