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Category: California News

Los Angeles, California - Attorney General Kamala D. Harris issued a consumer alert today to warn homeowners about mortgage loan modification scams.  The California Department of Justice has received an increased number of complaints from homeowners and has also been contacted by mortgage servicers that have expressed concern about these scams.

Scammers are calling and mailing homeowners, pretending to be their mortgage servicer or a representative from the Home Affordable Modification Program (HAMP), to offer fake loan modifications and “trial payment plans” to lower mortgage payments.  These scammers may send genuine-looking letters with the logo of the homeowner’s mortgage company, the homeowner’s account number, and deceptive contact information that routes homeowners to the scammers instead of their mortgage servicer.  They may also call from telephone numbers that show up on caller ID as the homeowner’s mortgage company. 

As with legitimate HAMP offers, homeowners are told that their loans may be permanently modified if they make three trial period payments and follow certain other requirements.  Homeowners are usually instructed to send payments via wire transfer or money order to sham addresses that supposedly belong to their mortgage company, only to later discover that they have been sending payments to scammers and have lost thousands of dollars while their real mortgage company has not received any payment during the duration of the scam. Currently, the federal HAMP and HARP programs are set to end on December 31, 2016.[1]

Other common mortgage modification scams include:

Important Tips

Homeowners should keep the following tips in mind to protect themselves from mortgage modification scams:

Additional Resources

To submit a consumer complaint about a mortgage loan modification scam to the Office of the Attorney General, visit oag.ca.gov/contact/consumer-complaint-against-business-or-company.