Mortgage Modifications: The Worst Scams

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Mortgage modification scams start with a telephone call or unsolicited mail and end with an empty house, a foreclosure and a homeless family. That was the case of The Kennedy’s as published by the KNSD.

The Kennedy’s were struggling to pay their bills. Their mortgage payments slowly encroached on their monthly budget and they began to fail on their payments. Foreclosure was a real possibility. They received a phone call they thought to be their lender explaining them they qualified for a reduction of their monthly mortgage payments of fifteen hundred dollars. They were ecstatic.

Fourteen thousand dollars later they realize it was all a scam. Unfortunately the discovery occurred too late as their house was already undergoing foreclosure. This story is sadly not isolated. Hundreds of desperate home owners that are struggling under a failing Economy are being bullied and abused by a growing number of mortgage consultant conmen that take like looters after a national disaster take advantage of the misery of others.

It is cases like these that have moved the authorities to take serious measures nationwide. This has included coordinated raids on large mortgage modification consultancy companies and the proposal of radical modifications to the debt relief and mortgage modification industry.

Some feel the measures are extreme and that they will be too restricting on the legitmate business for them to carry out their business. This will, according to detractors, limit the help these very people can receive.

However it is tragedies like that of the Kennedy’s that have moved these proposals. The Kennedy’s received an unsolicited phone call, new measures would limit this. The Kennedy’s were guaranteed they had been pre-approved for a large monthly reduction in their expenses, policy changes would prohibit making guarantees when the broker cannot be sure the lender will be willing. The Kennedy’s were asked to pay upfront for services linked to the Mortgage Modification they did not receive, again proposed amendments would protect families like that of the Kennedy’s from these tactics.

The truth is that unsolicited mail and phone calls are not in themselves an evil marketing method, maybe annoying but not necessarily bad. What makes the difference is the vulnerability of desperate households that cannot make their payments. These people need to be protected from ruthless conmen that like scavengers feed on the leftovers of the latest victim.

The deadline for business members and the public to counter these and other policy reforms ends the 9th of October. Will these measures protect people from these and other scams? Maybe. Will these proposed changes put out of business legitimate business that want to make an honest profit from providing a valuable service that is desperately needed? Maybe.