SCAMS BULLETIN Host Jay White is a volunteer atttorney who provides free legal services forlow income seniors in San Mateo, County, California.

April 15, 2020

CORONAVIRUS MORTGAGE SCAMS

Because of the Coronavirus, many people are facing financial challenges, especially paying their mortgage. If you’re unable to make your mortgage payments, you could lose your home to foreclosure. Federal lenders and some private lenders are offering borrowers temporary help, like stopping or delaying foreclosure or modifying the mortgage.

Scammers

It’s tempting to hire a company that says they can get a change to your loan that will reduce your monthly mortgage payment or take other steps to save your home. Unfortunately, many companies use half-truths and even outright lies to sell their services, or they make promises but don’t deliver.

Don’t pay up-front for help.

Federal law says that even if you hire someone to help you with your mortgage, you don’t have to pay them until they deliver the results you want. It’s illegal for a company to charge you a penny until you’ve accepted their written offer for a loan modification or other relief from your lender, and you’re free to reject an offer you don’t like. Even if you hire someone, you should always feel free to contact your mortgage servicer directly to see whether they can offer you additional loan options.

Need advice?

You can contact an approved counselor. The Department of Housing and Urban Development’s (HUD) lists approved housing counseling agencies in your state who can explain your options. Consider contacting the Homeownership Preservation Foundation (HPF) at 888-995-HOPE. HPF is a nonprofit organization that partners with mortgage companies, local governments, and other organizations to help consumers get loan modifications and prevent foreclosures.

Your state may offer additional support. Some states have frozen foreclosures. Find your state government’s website and look for the latest updates on help for borrowers.

Financial considerations of the Coronavirus.

A new federal law, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, creates two protections for some borrowers. The first is a temporary suspension – called a moratorium – of foreclosures for 60 days, starting March 18.

To be eligible, you must have a federally backed mortgage and be experiencing financial hardship because of the Coronavirus.

The second protection is a right to forbearance for 180 days. That means you can ask your loan servicer to reduce or suspend your mortgage payments for that time. If after six months, you’re still having trouble paying, you can request forbearance for another 180 days.

To know if your mortgage is federally backed you can call your mortgage servicer. You can get your servicer’s contact information from your billing statement.

More than half of U.S. mortgages are backed by Fannie Mae or Freddie Mac, and these mortgages count as federally backed.

To learn whether your mortgage is owned by Fannie Mae call (800) 232-6643.

To learn whether your mortgage is owned by Freddie Mac call (800) 373-3343.

If your loan is backed by the Department of Housing and Urban Development (FHA mortgages), Department of Agriculture (USDA mortgages), or Department of Veterans Affairs (VA mortgages), you also may be eligible for relief.

You can contact your loan servicer for information, no matter what type of mortgage you have. Tell them your situation and ask what options are available to you. Even if your mortgage is not federally backed, you may still qualify for other help.

If you’re considering forbearance, keep in mind that it is not loan forgiveness. You can ask your loan servicer for information about what happens after the forbearance ends. Your servicer should be able to tell you if it will extend the loan term so you can make the missed payments later, if your monthly payments will go up to make up the difference, if you will owe the entire unpaid amount in a lump sum, and how forbearance could affect your credit.

Attribution: US Federal Trade Commission