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Beware of Foreclosure Rescue Scams In these difficult economic times, home foreclosures have become all too common. The idea of a loan modification allowing a distressed borrower to stay in his or her home can be attractive to both borrowers and lenders. The federal “Home Affordable Mortgage Program” (‘HAMP’) is the primary program available for modifying Fannie Mae loans. Fannie Mae servicing guidelines require lenders to review troubled loans for possible modification under HAMP. If a loan is evaluated for HAMP but does not qualify, servicing guidelines require the mortgage service provider to consider other alternatives to foreclosure. Even if HAMP modifications are not available, in-house lender modifications may allow a mortgage loan to be modified. However, most in-house modifications are less favorable than modifications available under HAMP. Even those who are unable to afford legal counsel can get help with distressed mortgages. Assistance is available free of charge from HUD certified financial counseling services. Individuals may search online for a local HUD housing counseling agency (www.hud.gov) or call HUD’s interactive voice system at: (800) 569-4287. Unfortunately, homeowners facing mortgage foreclosure are often desperate and are easy prey for scam artists. And despite the free mortgage counseling services which are available, unscrupulous people are seeking to profit from the financial problems of others. Recently, the State Bar of Wisconsin has alerted attorneys that individuals and organizations may be attempting to charge homeowners for free HAMP information. Be advised that Wisconsin has a law to protect homeowners from fraudulent “foreclosure consultants.” Complaints can be filed with the Wisconsin Department of Agriculture, Trade & Consumer Protection (DATCP) at www.datco.wi.com, the Department of Financial Institutions at www.wdfi.org and the Federal Trade Commission at www.ftd.gov. John R. Nelson |