This week, Freddie Mac and Fannie Mae released their disaster relief policies that apply to Louisiana’s flood victims. These policies have been offered to borrowers located in the officially declared Major Disaster Areas.
It’s important to remember that these policies are only offered to buyers that discuss their options with their lender. Failing to check in with your mortgage service company will cause you to be reported as late on your mortgage payment, as your lender will be unaware of your situation and expect your check on the usual, pre-determined date.
Getting in touch with the correct mortgage service company, however, has become much more difficult, as many loan modification scammers have learned to target victims of natural disasters. Here are six important tips to assure that you don’t fall for a mortgage scam:
- Do NOT pay money to people who offer to work with your lender and modify your loan: Before a mortgage lender alters your loan in any way, he or she must provide a new written contract that documents these changes. It is also illegal for a mortgage lender to request a fee in advance, so do not pay anything upfront.
- DO NOT sign any unread documents: It’s important to read every word in a document that you are given. In many cases, fraudulent foreclosure consultants will transfer ownership of the property to the “rescuer,” or the scammer.
- Do NOT change the title of your house to a “foreclosure rescuer”: Fraudulent foreclosure consultants often promise that if you transfer ownership of your property, then you can stay in your house as a renter and re-purchase your property at a later date. Instead, you will be evicted from your home.
- DO call your lender yourself: The safest way to assure that you do not fall for a mortgage scam is by personally calling your lender. This phone number should not come from an email or document sent to your house, but rather the number you personally have on file for your lender.
- DO keep paying your monthly mortgage fees: Until you personally get in touch with your lender, and confirm that you reside in one of the Major Disaster Areas, you must continue to pay your mortgage fees. Loan modification scammers often advise homeowners not to continue paying these fees, but failure to deliver the money will actually result in late payments.
- Do ask your lender to specify how your loan will be modified: Make sure you understand if your lender is suggesting to modify your loan or to use an alternate program to help you through this difficult time. You should also request your lender to explain the implications of modifying your loan, as this could affect your credit score and ability to purchase or refinance in the future.
When in doubt, gather as much information as you can, and call your lender directly to ensure you have the right company to help you through any situations that you may question.
Before making any final decisions, or for more information about these tips, contact one of our loan officers today. In this time of need, we are happy to help our customers, friends, and people impacted by natural disasters to help get through the tough time and back on track.