How can I protect myself from mortgage modification scams and foreclosure rescue scams?

You should proceed with caution when dealing with anyone offering to help you modify your mortgage or to rescue you from foreclosure. You can seek assistance from a counselor approved by the Housing and Urban Development (HUD) agency at no cost to you. You can also work with your lender directly.

The following tips can help you avoid scams involving mortgage modification and foreclosure rescue scams:

• Contact your lender or mortgage servicer. Talk with an agent in the loss-mitigation department about mortgage modification options and other alternatives to foreclosure.
• Ask a legitimate housing or financial counselor for help. HUD-approved housing counselors are available at an interactive voice system at (800) 569-4287 or on the HUD website. There is no fee for this assistance.
• Make all mortgage payments directly to your lender or mortgage servicer. Be wary of anyone offering to make mortgage payments for you. Do not stop making your payments.
• Know what you are signing.
  • Read and understand every document that you sign. Never rely solely on an oral explanation of a document.
  • Make sure that you understand every aspect of a document. Otherwise, the document may obligate you to terms you do not want, and it may convey ownership of your home to someone else.
  • Be wary of signing documents with blank spaces that can be filled in later.
  • Be wary of signing a document that contains errors or false statements, even if someone promises to correct them.
  • If you do not understand a document, seek legal assistance or a financial counselor you trust.
• Do not sign over your deed without consulting a trusted expert. Foreclosure scams often involve the transfer of homeownership to a third party. Before agreeing to a title transfer, you should consider advice from your legal assistance, financial adviser, credit counselor, or another independent person you can trust. When you sign over your deed, you lose your rights to your home and any equity you have, but you remain obligated to satisfy the terms of the mortgage.
• Get promises in writing. Be wary of accepting oral promises and agreements involving your home, because they usually are not legally binding. Protect your rights with a written document or a contract signed by the person making the promise. Keep copies of all contracts that you sign. Never sign anything that you don't understand and agree to.

Report suspicious activity to relevant federal agencies and to your state and local consumer protection agencies. Reporting con artists and suspicious schemes helps prevent others from becoming victims. Learn more on the Report a Fraud/Scam page.

Last Reviewed: April 2021