Scam Dupes Home Owners into False Loan Audits

As Alex reported 10/1/2011 on Property Source Radio.  – Daily Real Estate News | Tuesday, Sept 27, 2011

More home owners are being tricked into a forensic loan audit, a new scam that targets struggling home owners looking for a loan modification to save their home from foreclosure.

Several organizations, usually linking themselves to attorney and auditor organizations, have popped up in the last two years offering forensic loan audits. The Federal Trade Commission and Better Business Bureau say complaints about these “loan audit” companies have skyrocketed since the beginning of the year.

In the scam, the organizations claim to review a home owner’s mortgage documents to determine whether their lender had complied with state and federal lending laws. They then promise to get the home owner a quick loan modification and possibly a principal reduction on their mortgage too. Home owners pay an upfront fee—usually about $3,000.

However, home owners say that they aren’t getting a loan modification and usually nothing happens after the audit, even when errors in loan documents are revealed.

“They lure consumers to believe that by hiring them for a review of a loan modification package, they can expedite the process and get better results, or they make false promises that they can get a loan mod or principal reduction,” Josh Fuhrman, FTC’s senior vice president of community affairs, told AOL Real Estate News. “Home owners are not typically getting any results. [Scammers] are just stringing [home owners] along, or they disappear.”

Source: “Home Owners Beware: Forensic Loan Audit Scam,” AOL Real Estate (Sept. 26, 2011)

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