Be on the lookout for "mortgage relief" companies that cloak themselves in government logos.
The only thing they'll relieve you of is your cash.
Less than a month after the Consumer Financial Protection Bureau (CFPB) announced it was targeting false mortgage advertising , it shut down two companies that bilked consumers out of $10 million nationwide.
The federal consumer watchdog this week successfully petitioned U.S. District Court Judges in California to shut down the National Legal Help Center, operated by Najia Jalan and Richard K. Nelson and the Gordon Law Firm, operated by Chance Edward Gordon and Abraham Michael Pessar.
CFPB alleges the companies promised to prevent foreclosures or renegotiate troubled mortgages, but violated the Dodd–Frank Wall Street Reform and Consumer Protection Act and Regulation O, formerly known as the Mortgage Assistance Relief Services (MARS) Rule .
The schemes allegedly illegally charged large upfront fees, misrepresented that they would secure loan modifications, instructed homeowners to stop paying their mortgage and reeled in their marks by claiming to be affiliated with government agencies or programs, including the National Mortgage Settlement and the Independent Foreclosure Review.
"We are taking on schemes that prey on consumers who are struggling to pay their mortgages or facing foreclosure," said CFPB Director Richard Cordray.
Government logos aren't always government logos
He added, "We are especially concerned with those who misrepresent government programs or websites to divert distressed homeowners from needed assistance."
The tactics prompted the CFPB to issue the statement, "Just because something has a government logo on it doesn’t mean that it’s legitimate."
Mortgage assistance and foreclosure relief scams are designed to separate you from your money. They often emblazon their direct mail, email or other information with emblems, logos and names intended to mimic government agencies or programs, lawyers or law firms, or other legitimate operations.
Scammers also frequently reinvent new masquerades to commit fraud. They also frequently target vulnerable struggling homeowners. It's not always easy to spot them.
Recent fraudulent activity also prompted CFPB to offers red flags that signal when a ruse is likely in the works.
Beware if anyone:
- Tells you to stop making mortgage loan payments. Not making your mortgage loan payments could hurt your credit score and limit your options.
- Tells you to start making payments to someone other than your servicer or lender.
- Asks you to pay high fees upfront to receive services.
- Promises to get you a loan modification.
- Asks you to sign over title to your property.
- Asks you to sign papers you do not understand.
- Pressures you to sign papers immediately.
You can learn if the company is bona fide and get help by calling (855) 411-2372 from 8 a.m. to 8 p.m. ET, Monday-Friday to be connected to a U.S. Department of Housing and Urban Development (HUD)-approved housing counselor.
If you think you’ve been scammed, report it immediately. The longer you wait, the more difficult it will be to prevent serious problems. You can:
- Contact your State Attorney General .
- Report a scam to the federal Financial Fraud Enforcement Task Force .
- File a complaint with the Federal Trade Commission .
- Contact CFPB and tell them about your experience.