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Mortgage Relief Scams


When people fall behind on their mortgage payments and fear losing their homes, they can be vulnerable to crooks who pretend to offer a helping hand. The COVID-19 pandemic gave fraudsters even greater leverage to exploit worried homeowners with phony promises to ease their debt burden and forestall foreclosure.

The Federal Trade Commission (FTC) recently shut down a criminal ring in California posing as mortgage relief agencies and using names like Home Matters USA and Academy Home Services. They promised distressed homeowners help with refinancing, sometimes suggesting that they were affiliated with government relief programs, and “regularly misled consumers, saying they had a track record of success and were able to ‘beat the system,’ ” according to the FTC. 

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Mortgage relief scammers like these seek out targets in various ways. Some advertise legal or financial counseling services via online ads, posters tacked to telephone poles, or flyers slipped under doors. Others comb through local government property files or peruse notices in newspapers to identify homeowners facing foreclosure. They’ll use logos, letterheads or “spoofed” caller ID numbers to suggest they have ties to legitimate lenders, nonprofit organizations or the government-chartered mortgage companies Fannie Mae and Freddie Mac.

Video: Beware of Mortgage Relief Scammers

Warning Signs

  • A mortgage relief service guarantees that it can prevent a foreclosure or get your loan modified, regardless of your financial situation.
  • The company demands an upfront fee for help renegotiating your loan. That’s illegal under the federal Mortgage Assistance Relief Services (MARS) Rule.
  • You’re told not to contact your mortgage lender or servicer, housing counselor or your own attorney.
  • A promised loan modification is characterized as “government-approved.” Scammers often pretend to be affiliated with government agencies.
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Have you seen this scam?

  • Call the AARP Fraud Watch Network Helpline at 877-908-3360 or report it with the AARP Scam Tracking Map.  
  • Get Watchdog Alerts for tips on avoiding such scams.

How to protect yourself from this scam

  • Don’t respond to unsolicited calls, texts or emails from mortgage relief companies. Contact your lender directly if you’re having trouble making mortgage payments and ask about options for modifying your loan or repayment schedule.

  • Steer clear of relief companies that don’t make federally mandated disclosures. The MARS Rule requires, among other things, that firms tell prospective clients they are not associated with the government or the customer’s lender and that they detail the potential negative consequences of holding up mortgage payments.

  • Consider going to a nonprofit credit or housing counselor for free or low-cost help dealing with mortgage trouble. The U.S. Department of Housing and Urban Development (HUD) has an online directory of government-approved housing counseling agencies.

  • Don’t pay any fees in advance. A mortgage assistance firm cannot legally collect money from you until it has secured a deal in writing with your lender or loan servicer.

  • Payments should go to the financial institution that holds your mortgage, not a third party.

  • Don’t stop making mortgage payments on a relief company’s recommendation. You risk losing your home and damaging your credit rating.

  • Never sign documents that you haven’t had a chance to carefully read, that you don’t fully understand, or that have lines or spaces left blank.

  • Don’t transfer your property title to anyone.
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More Resources

  • If you think you’ve been targeted by a mortgage relief scam:
    • Call the FTC at 877-382-4357 or file an online complaint.
    • Report it to the FHFA’s Office of Inspector General, online or at 800-793-7724.
    • Contact your state attorney general’s office.
  • The federal Consumer Financial Protection Bureau has an online guide to relief options and borrower protections for people with Fannie Mae, Freddie Mac and other government-backed mortgages.

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spinner image cartoon of a woman holding a megaphone

Have you seen this scam?

  • Call the AARP Fraud Watch Network Helpline at 877-908-3360 or report it with the AARP Scam Tracking Map.  
  • Get Watchdog Alerts for tips on avoiding such scams.