Fraud in the Loan Modification Industry

“All those people who did unconscionable things to people with the subprime and predatory lending…they’re making their living now in these mortgage modification scams,” says Shanna Smith, CEO of the National Fair Housing Alliance (NFHA), a consortium of more than 220 private, non‐profit fair housing organizations. The following findings were mentioned in the video below regarding ‘fraudsters’:

  • 55% required an upfront fee to start work
  • 43% guaranteed or promised they could secure a loan modification before reviewing documents
  • 24% advised or encouraged homeowners to stop making their mortgage payments or to stop contacting their lenders
  • 12% discouraged homeowners from seeking free help from government-approved housing counseling agencies

Source: Yahoo! Daily Ticker

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