Skip to Page Content | Skip to Site Navigation | Skip to Section Navigation

When Is "Mortgage Relief" Really Mortgage Fraud?

SVP Dwight RobinsonThe arrival of National Consumer Protection Week (March 6-12) makes this the right time to remind the public of the national efforts underway to protect borrowers from foreclosure fraud. These efforts bring together public agencies, non-profit groups, and companies like Freddie Mac in the belief that helping borrowers learn how to avoid fraud is fundamental to helping them avoid unnecessary foreclosure.

Anyone attracted by patriotically decorated ads from for-profit companies that promise to fix delinquent mortgages and keep you out of foreclosure for an upfront fee should know the following:

First, the best thing to do if you or someone you know can’t pay their mortgage is to call their loan servicer or a local HUD-approved counselor and explore workout options. Last year Freddie Mac and its servicers kept more than 275,000 delinquent families out of foreclosure through loan modifications or other arrangements. That's about double the number of borrowers helped in 2009. Bottom line – it pays to call your servicer.

Second, do your homework before paying money to a mortgage relief company. Freddie Mac’s CreditSmart curriculum has taught thousands of Americans how to better manage their credit and household budgets and make wise financial choices. Now celebrating its tenth anniversary, CreditSmart’s online curriculum can also teach you how to spot and avoid credit traps and foreclosure rescue scams.

Our efforts to help more borrowers avoid these rescue scams include the Freddie Mac Borrower Help Centers we opened in targeted distressed communities and Freddie Mac’s National Borrower Outreach Network, which provides holistic financial counseling by phone.

Staffed by trained counselors, our Borrower Help Centers and Borrower Help Network are designed to help you understand your options for avoiding foreclosure, but also provide an objective third-party opinion on those glitzy offers from so-called mortgage relief specialists that come in the mail or pop up on the radio or TV.

Freddie Mac is also working to alert the public about foreclosure fraud through online videos, joint information campaigns with lenders, and broad-based alliances with such trusted partners as the U.S. Department of Housing and Urban Development, NeighborWorks, and the Lawyers’ Committee for Civil Rights. These alliances give borrowers access to the latest information about mortgage fraud, as well as the ability to file online reports of mortgage fraud to their state’s attorney general.

Finally, every borrower worried about avoiding foreclosure should know about the Federal Trade Commission's Mortgage Assistance Relief Services (MARS) rule, which took effect on January 31, 2011. MARS requires for-profit mortgage rescue firms to disclose in their advertising or other customer communications – including telemarketing calls – that the borrower’s servicer has not approved them to offer assistance and the servicer may in fact not agree to modify the borrower’s loan.

In addition, MARS prohibits mortgage relief companies from telling borrowers to stop communicating with their servicers. This is aimed at curbing another common tactic, in which borrowers are told to send their mortgage payments to the mortgage relief company instead of their lender a practice that many times puts the borrower in greater jeopardy of losing their home.

For more information on mortgage fraud, visit or If you think you've been the victim of mortgage fraud, report it immediately.


Have a comment or question about this post? Email us to let us know what's on your mind.

Maximum of 250 characters. 250 chars remaining.


Our Executive Perspectives feature insights from company leaders on key trends in housing finance and how Freddie Mac is supporting the nation's housing recovery.

Subscribe to Executive Perspectives

Check Out Our New Blog on Housing

Back to Top