The common scams
The up-front fee. A company promises to get you a loan modification or stop the foreclosure and asks you to pay first. Under the federal Mortgage Assistance Relief Services rule (12 CFR Part 1015) most companies may not collect a fee until you have a written offer from your lender and have signed an agreement with your lender accepting it.
Stop paying your lender. You are told to send your payments to the company, or to stop paying the mortgage altogether. Your payments go to your servicer, and stopping them makes things worse.
The deed transfer or rent-back. You sign over your deed with a promise that you can rent the home and buy it back later. The deed transfer is real, and the promise often is not.
The look-alike. A name or website that sounds like a government agency, a nonprofit or your own lender.
The bankruptcy trick. Someone offers to file a bankruptcy to stop the sale and takes your money, or files without your knowledge. A real bankruptcy needs your own signature and your own decision to file. Be wary of anyone who files for you, takes money to “stop the sale”, or will not explain what was filed, and talk to a licensed bankruptcy attorney or legal aid first.
Red flags
A guarantee that they can stop the foreclosure. Pressure to decide today. A request to sign papers you have not had time to read, or papers with blanks. A request to keep it secret from your lender or family. Any request to sign over your deed, or to pay by cash app, wire or gift card.
What to do instead
Call your servicer and ask for a loss mitigation application. Then call a HUD-approved housing counselor, free, at 1-800-569-4287. For a lawyer who costs little or nothing, start at LawHelp.org or call 211.
If you already signed something
Do not send more money. Gather every paper and ask a legal aid office or a real estate attorney right away. Some states give you a short window to cancel certain contracts, and a deed transfer is much easier to challenge early.
Where to report it
Report to the Federal Trade Commission at ReportFraud.ftc.gov, to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint, and to your state attorney general. Reports help the people who investigate these companies.