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Mortgage Relief Scams

En español | 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 has given fraudsters even greater leverage to exploit worried homeowners with phony promises to ease their debt burden and forestall foreclosure.

Mortgage relief scammers 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 ties to legitimate lenders, nonprofit organizations, or the government-chartered mortgage companies Fannie Mae and Freddie Mac.

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Once they’ve made contact, the fraudsters will offer, for a fee, to negotiate with a mortgage lender to reduce or delay payments and stave off foreclosure. They may try to talk you into making house payments directly to them while they get things straightened out, or advise you to stop making payments period, on the pretext that it will get you a better deal from your lender or the loan servicer managing your account. They’ll “guarantee” results, or your money back, perhaps touting a special relationship with banks that they’ll use on your behalf. 

When they’ve stolen as much as they think they can get away with, the Federal Trade Commission (FTC) warns, they’ll stop returning calls and just vanish.

Other tactics involve securing the title to the victim’s house, through stealth (burying the transfer document in a thick “loan agreement”), or with supposed deals to rent the house to the former owners until they can buy it back or to sell it on their behalf (cons known respectively as “rent-to-buy” and “equity-skimming”). Some fraudsters represent themselves as loan experts who will perform a “forensic audit” of your mortgage to find mistakes you can use to pry better terms out of your lender. The FTC says there’s no evidence such audits help you get mortgage relief.

With the coronavirus causing widespread economic pain, scammers are courting home borrowers even more aggressively, according to the Federal Housing Finance Agency (FHFA). Be wary of calls, emails and texts promising to use the pandemic to reduce or delay your mortgage payments. Legitimate lenders and loan servicers have hardship programs for borrowers — reach out to yours and ask what it can do to help.

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.


  • Do contact your lender directly if you’re having trouble making mortgage payments and ask about options for modifying your loan or repayment schedule.
  • Do check out any attorney who offers to get you mortgage relief. Contact your state bar association or search on its website to see if there’s a record of past problems.
  • Do 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 detail the potential negative consequences of holding up mortgage payments.
  • Do 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 and Development (HUD) has an online directory of government-approved housing counseling agencies.


  • Don’t respond to unsolicited calls, texts or emails from mortgage relief companies.
  • 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.
  • Don’t agree to make payments to someone other than the financial institution that holds your mortgage.
  • Don’t stop making mortgage payments on a relief company’s recommendation. You risk losing your home and damaging your credit rating.
  • Don’t 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.

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.

Published September 4, 2020

About the Fraud Watch Network

Whether you have been personally affected by scams or fraud or are interested in learning more, the AARP Fraud Watch Network advocates on your behalf and equips you with the knowledge you need to feel more informed and confidently spot and avoid scams.

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