Mortgage Elimination Scams to Avoid

Apr 17
02:54

2024

Kristie Lorette

Kristie Lorette

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In the complex world of home financing, homeowners struggling with mortgage payments often seek relief through various assistance programs. However, amidst legitimate aid, deceptive schemes known as "mortgage elimination scams" lurk, preying on vulnerable individuals. These scams promise to free homeowners from their mortgage obligations through dubious legal tactics and misleading financial advice, often leading to severe financial losses or even the loss of homes.

Understanding Mortgage Elimination Scams

Mortgage elimination scams exploit homeowners' desperation by promising to "eliminate" or "wipe out" mortgage debts. These scams come in various forms,Mortgage Elimination Scams to Avoid Articles each with the potential to cause significant financial harm.

Common Types of Scams

  1. The Signature Deception: Scammers claim that mortgage lenders illegally profit from selling the homeowner's loan signature to secondary markets. They offer to "eliminate" the mortgage for a fee, misleading homeowners about the legality of secondary mortgage markets, which are, in fact, legal and common.

  2. Currency Value Scam: Here, fraudsters argue that due to the devaluation of the U.S. dollar by Federal Reserve actions, mortgages are not legally enforceable. Homeowners are tricked into transferring property titles and paying upfront fees, only to find themselves defrauded.

  3. Phantom Bank Funds: This scam alleges that banks do not actually possess the money they lend, claiming that loans are therefore invalid. Homeowners are fooled into paying for fraudulent loan releases, leading to multiple defaulted loans and severe financial repercussions.

Legal and Financial Implications

Engaging with these scams can lead to:

  • Loss of substantial fees paid to the scammers.
  • Legal complications or loss of property due to transferred titles.
  • Damaged credit scores from unresolved debts or legal battles.

How to Protect Yourself

To safeguard against these scams, homeowners should:

  • Seek Reputable Advice: Consult with legitimate financial advisors or real estate attorneys. Organizations like the U.S. Department of Housing and Urban Development (HUD) offer counseling services.
  • Research Thoroughly: Before engaging with any service offering mortgage relief, thoroughly research their credentials and read reviews.
  • Beware of Upfront Fees: Legitimate agencies do not require large upfront fees for mortgage assistance.
  • Understand Your Mortgage: Being well-informed about your mortgage terms and the legalities of mortgage trading can shield you from misleading claims.

Real Stories, Real Losses

The Federal Trade Commission (FTC) regularly reports on actions taken against such scams. For instance, in a recent year, the FTC shut down a nationwide scam that collected more than $1 million in illegal fees from unsuspecting homeowners by promising them mortgage relief that never materialized.

Conclusion

Mortgage elimination scams offer false hope and lead to dire financial straits. Homeowners must approach mortgage relief options with skepticism and due diligence. By staying informed and seeking help from reputable sources, homeowners can protect themselves from these deceptive and damaging schemes. For more detailed guidance, visiting consumer finance protection sites like the Consumer Financial Protection Bureau (CFPB) can provide valuable resources and alerts on current scams.