It's very sad, but with thousands of homeowners struggling and fearing foreclosure, there are also a number of scams out there that are preying on people's financial situations. And while last week Google announced its decision to get rid of a number of mortgage modification scheme advertisers, this week Yahoo and Bing also announced the same plans.
The decision to get rid of these scheme advertisers came after an investigation from the Special Inspector General for the Troubled Asset Relief Program found more than 100 alleged scams that were being advertised through Bing, Yahoo and Google. After this, while the alleged schemers were blocked, a number of other advertisers were also suspended from the sites.
Quite often these scams would work by the advertiser collecting an upfront fee from the struggling homeowner. Owners were also often advised to stop making their mortgage payments, with that money sometimes in turn going to the alleged scammers.
These scams would also quite frequently look very legitimate, with government agency sounding names, or even a government seal attached to the advertisement. However, they were not endorsed by the government.
In the end, many homeowners never received mortgage modifications, even though they paid thousands of dollars to these scammers.
One woman recently shared her story. In total she gave $2,198 to one of these companies that promised to get her a mortgage modification. She was told that if she did not get the results she wanted, that she would be refunded. However, now she is about to lose her home -- and is definitely not happy with the results -- but she is yet to be refunded.
Of course stories like this woman's are particularly frustrating. However, the fact that these scams are out there, does highlight why it so important for struggling homeowners to go to reputable attorneys and nonprofit debt counselors when trying to receive a mortgage modification.
Source: Consumer Affairs, "Feds Shut Down Mortgage Modification Scams on Yahoo and Bing," James R. Hood, Nov. 21, 2011