When the housing market collapsed, many homeowners discovered that their mortgage payments were higher than the actual market value of their houses. Unable to make ends meet, many homeowners even found themselves facing foreclosure proceedings and eventually lost their homes in the process. In order to avoid the possibility of losing their homes, some homeowners may have ended up turning to mortgage modification companies for assistance; unfortunately, not all of them were genuinely interested in helping out distressed homeowners.
An out-of-state man was recently sentenced to federal prison for his role in running a fraudulent mortgage modification scam that targeted Arizona residents, among others. The 65-year-old admitted that he defrauded 250 distressed homeowners out of more than $670,000 in up-front assistance fees for mortgage modifications, promising to decrease homeowners' mortgage payments by 25 percent. The scam also included encouraging homeowners to file for bankruptcy in order to delay losing their homes.
Unfortunately, when homeowners face financial difficulties and are on the verge of losing their homes, they may be more vulnerable to believing schemes that promise to decrease their financial burdens. However, sometimes these companies that sound too good to be true are actually too good to be true and end up putting the person in even more financial distress than they were to begin with. It is important to thoroughly research any company before approaching it for assistance and to consider legal protections before turning to sketchy companies that make lofty promises.
Even though it is true that filing for Chapter 7 bankruptcy does put an automatic stay on foreclosure proceedings, the decision to file should be an individual's personal one, without any added pressure from outside parties. It is possible to keep ownership of the residential home and other assets after declaring bankruptcy, and Arizona residents facing financial difficulties may want to look into this federal protection as an option for restarting their financial life.