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Scams target those looking for mortgage relief

Nearly everyone goes into buying a home expecting the best. But in reality, many homeowners in Tennessee find themselves behind on mortgage payments and facing the prospect of their homes being foreclosed on. Being contacted by or hearing about a company that offers to help solve mortgage debt problems may give people hope. However, some of these companies are not legitimate and homeowners may even end up worse off after all is said and done.

According to the Federal Trade Commission, there a few different tactics that companies use to try to scam homeowners looking for mortgage relief. Some of them may claim that they are lawyers or work on behalf of lawyers. While this can be verified by checking with the state bar, many people do not bother. Sometimes the companies induce people into signing over the deed to their house with a promise that the homeowner will be able to get it back. And some may have homeowners submit their monthly payments to the company directly with a promise that it will negotiate with the lender. However, sometimes those payments never leave the pockets of the company.

Homeowners are protected by the Mortgage Assistant Relief Services Rule put into place by the FTC. Under this rule, companies must follow through with their promise to work out a form of debt relief with the homeowner's lender before they are allowed to collect any fees. In addition, companies must be up front about who they are and they must disclose the fact that the lender may not agree to any debt relief.

Seniors in particular are at risk for being scammed, especially by companies offering reverse mortgages reports the Huffington Post. Reverse mortgages are intended to tap into a homeowner's equity and essentially help fund his or her retirement. However, may seniors do not understand the terms of these agreements and subsequently wind up in foreclosure. In fact, the rate of default or foreclosure for seniors with reverse mortgages in one in 10.

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Rothschild & Ausbrooks, PLLC
1222 16th Avenue South, Suite 12
Nashville, TN 37212

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