One in nine home owners are more than 90 days behind on their mortgage payments, which has prompted loan modification scams that promise to rescue home owners from foreclosure doom to skyrocket.
Four fair housing organizations released findings this week uncovering some of the most popular loan modification scam tactics after a yearlong investigation of about 80 companies.
According to the report, some of the common scam tactics used were:
* 55 percent required an upfront fee to begin work or required a low initial fee to conduct minimal work — such as reviewing loan documents — on behalf of defaulting home owners.
* 43 percent guaranteed or promised they would be able to secure a loan modification even prior to learning about the home owner’s financial limitations.
* 24 percent advised or encouraged home owners to stop making their mortgage payments or to stop contacting their lenders.
* 16 percent guaranteed a loan with a lower interest rate, between 2 and 6 percent.
* 12 percent discouraged home owners from getting free help from government-approved housing counseling agencies.
The report was issued by The National Fair Housing Alliance, The Connecticut Fair Housing Center, Housing Opportunities Made Equal of Virginia, and the Miami Valley Fair Housing Center.