How to Spot Foreclosure and Loan Modification Fraud Scams
Author: Ian C. Langtree - Writer/Editor for Disabled World (DW)
Published: 2011/04/07 - Updated: 2026/01/25
Publication Type: Instructive / Helpful
Category Topic: Editorials - Op-eds - Related Publications
Page Content: Synopsis - Introduction - Main - Insights, Updates
Synopsis: This information identifies common fraud tactics used by companies that prey on desperate homeowners, including upfront fee schemes, title transfer scams disguised as rent-to-own agreements, and fake government programs. People with disabilities and seniors on fixed incomes are especially vulnerable to these predatory practices when struggling with mortgage payments, making this practical advice essential for recognizing red flags like guaranteed promises, pressure to sign unfamiliar documents, or requests to redirect mortgage payments to third parties - Disabled World (DW).
Introduction
Homeowners in risk of foreclosure can face a lot of stress and worry. Some dishonest companies are taking advantage of those desperate for help paying the mortgage by claiming they can guarantee to stop a foreclosure, but fail to help the homeowner in any way. Often they will ask for a large one-time up-front fee to take care of a loan modification, and then walk away with your money. Many frauds begin with a person or company that pretends to be a government agency or program. They may mimic government websites and program names.
Other scams include getting a homeowner to sign over the title of his or her home, then pay the new owner in a "rent-to-own" payment plan. The scammer will then raise the rent or use other methods so you can't make the payments, leaving them free to sell the house. In other cases, the scammers will ask you to sign paperwork to make your mortgage current. In reality, you are signing over the title of your house for a so-called "rescue" loan.
Main Content
What to do When Discussing a Home Loan Modification
Home loan modifications can be legitimate and beneficial if handled by honest government programs or attorneys.
Here are a few helpful tips to know if you're dealing with a legitimate organization:
- Get the name of the person/company, and research them. Know with whom you are talking, and get contact information.
- Watch out for guarantees to save your home. It is possible to successfully modify your home loan, but legitimate companies will not make exaggerated claims or guarantees.
- Don't feel pressured to sign something you haven't read or understand fully - when in doubt, contact an attorney who can tell you what you're signing
- Watch out for any person or company that asks you to pay them instead of your mortgage in exchange for a loan modification.
Loan Modifications are One of Several Potential Options
Home loan modifications are not the only option. Deeds in lieu of foreclosure and bankruptcy can also be good choices for struggling homeowners. If you are concerned with foreclosure contact a bankruptcy attorney.
While it can be difficult to understand the steps you should take if you are behind on mortgage payments, legitimate help is out there.
Insights, Analysis, and Developments
Editorial Note: Foreclosure can feel isolating, but recognizing the difference between genuine assistance and exploitation shouldn't require a law degree. The scammers count on your fear and urgency to cloud your judgment, but simple steps - researching who you're dealing with, refusing to be rushed, and questioning any guarantee - can protect both your home and your financial future. If you're underwater on your mortgage, remember that legitimate options exist beyond loan modifications, including bankruptcy protections and deeds in lieu of foreclosure. When someone promises the impossible or demands money upfront, trust that instinct telling you something's wrong. Your skepticism isn't paranoia; it's your best defense against those who would turn your hardship into their payday - Disabled World (DW).
Author Credentials: Ian is the founder and Editor-in-Chief of Disabled World, a leading resource for news and information on disability issues. With a global perspective shaped by years of travel and lived experience, Ian is a committed proponent of the Social Model of Disability-a transformative framework developed by disabled activists in the 1970s that emphasizes dismantling societal barriers rather than focusing solely on individual impairments. His work reflects a deep commitment to disability rights, accessibility, and social inclusion. To learn more about Ian's background, expertise, and accomplishments, visit his full biography.