With more than 2.1 million homeowners estimated to lose their homes this year according to Moodyâs projections, more and more homeowners nationwide are falling prey to mortgage modification scams promising to help homeowners retain their homes.
In Arizona, foreclosure-rescue scams have skyrocketed 30 percent in the past few months, Arizona Attorney General Terry Goddard revealed at a recent meeting of the Arizona Foreclosure Prevention Task Force (âForeclosure Scams on the Rise,â The Arizona Republic, May 20, 2009).
âFirms are contacting homeowners on the verge of foreclosure, offering help and instead taking the money the homeowner has,â Goddard said. âWe have a real obligation to find these people and prosecute them.â
New foreclosure-rescue scams have arisen under the federal governmentâs mortgage loan modification plan that began in March, in which lenders work with homeowners who are at risk of losing their homes to reduce the interest rate or principal on a mortgage in an effort to help these homeowners avoid foreclosure. The federal program was recently expanded to assist homeowners who previously didnât qualify for mortgage loan modifications due to the fact that they owed more on their home than what the home was worth.
Just-released data shows that mortgage companies have made more than 55,000 offers to modify mortgage loans since the government mortgage modification programâs March inception date, according to The Arizona Republic. Currently, 14 companies, which service 3 out of every 4 of all U.S. mortgages, have signed up to do mortgage modifications under the new government plan.
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