Avoid mortgage debt relief scams

When life gets tough and Arizona residents are facing problems such as unemployment, wage garnishment and missed payments on various bills, the one place they may find comfort is in their home. That's why when there is threat of repossession of the home due to missed mortgage payments, Arizona residents may find themselves doing anything they can to find debt relief, including falling victim to mortgage relief scams.

Many companies claim they can change loans to reduce monthly mortgage payments or take other steps to help save the home and that they almost always get successful results. Some companies even claim they are affiliated with the government. Consumers may not be aware that the Federal Trade Commission has a rule in place to protect homeowners -- companies cannot collect any fee until the homeowner has received an offer of relief from the lender and then accepted it.

The Federal Trade Commission tries to create awareness about various mortgage scams where fraudsters prey on innocent homeowners under distress by making false promises. There are promises to perform forensic audits, give counseling and some even have homeowners unknowingly sign papers relinquishing title to their home.

One federally guaranteed way to protect one's assets and in some cases retain possession of one's home is by filing for personal bankruptcy. Filing for bankruptcy not only wipes out most debts and puts an end to wage garnishment, it also places an automatic stay on foreclosure proceedings. A bankruptcy attorney may be able to guide Arizona debtors through the process to ensure they rightfully retain possession of their house, without falling prey to a scheme.

Source: Federal Trade Commission, "Mortgage Relief Scams," accessed July 28, 2015

Categories