Simple. Advertising. Borrower desperation simplifies the fraudsters' job to the point where all they have to do is advertise a promise and post a phone number.
Ads seem to work because mortgage fraud victims have at least two things in common: they're not sure whom to trust and they're willing to try anything. It doesn't matter whether a borrower is trying to modify their loan to avoid foreclosure, trying to refinance their loan, or qualify for a new conforming, conventional mortgage.
Freddie Mac fraud investigator Rob Hagberg said "Consumers can protect themselves by remembering the two things fraudsters have in common: empty promises plus big fees, usually upfront." The fees, Hagberg added, are typically for services that consumers can get for free from responsible lenders or HUD-approved non-profit counseling agencies. Once they're paid, fraudsters billing themselves as mortgage experts may steer borrowers to high interest rate loans packed with unnecessary fees terms.
Fraudsters targeting delinquent borrowers often tell them to stop paying their mortgage (or pay it to them) while they "work things out" with the lender. Instead they pocket the money and let the client slip into foreclosure.
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