"What happens for that fee is that the scam company does little more than call the phone number on the homeowner's mortgage statement and ask that the homeowner's loan be modified," Robinson says. "Or the company writes a letter asking for the same thing, and that's all."
Don't transfer the property deedScammers sometimes try to encourage homeowners to turn over the ownership reins. In one popular scheme, an organization promises to buy an at-risk homeowner's home and agrees to let the former homeowner rent it out.
Scammers sell these programs by suggesting that giving the title to a new borrower with a better credit rating will help secure financing thus preventing loss of the home.
Supposedly, the homeowner is allowed to live at the residence as a renter with the option of buying it back later.
"Ultimately the organization has no intentions of selling the home back to the consumer," Fuhrman says.
In some cases, the scammer sells the home to someone else. Or the crook takes the homeowner's title, any equity in the home and additional processing fees before disappearing and leaving the home to default, Fuhrman says.
In short, run away from people who ask you to transfer your property deed or title to their name. Then, report them to the FTC.
Ignore promises of shortcutsScammers often promise to make foreclosure problems go away overnight. Be skeptical of such claims.
"The foreclosure process is a lengthy and difficult process," Fuhrman says.
Any potential solution to foreclosure takes time. An at-risk homeowner may be asked to negotiate a workout package with the loan servicer. In addition, the homeowner may need to seek financial assistance from other organizations and craft an individual plan to reduce monthly expenses.
Also, say, "No thanks," to third parties who guarantee to single-handedly stop the foreclosure process, or who promise to deliver a loan modification.
"Only the mortgage servicer can stop a foreclosure process, and no one but your lender can guarantee a modification," Reichel says.
“Many scammers are presenting themselves as affiliated or associated with the government when that is not the case.”
Avoid any company that offers to collect your mortgage payment while negotiating with the lender. Such companies often collect several months' worth of payments before disappearing.
"Don't send your mortgage payments to anyone other than your mortgage company," Reichel says.
Finally, stay away from businesses or counselors who tell you not to contact your lender, lawyer, or credit or housing counselor.
Avoiding scamsThe Obama administration has announced plans to crack down on loan modification fraud or foreclosure rescue scams.
In the meantime, homeowners are encouraged to visit the Web site of the Treasury Department's Office of the Comptroller of the Currency to learn more about avoiding mortgage modification scams.
The federal government has made available more than $400 million for foreclosure counselors to help homeowners avoid foreclosure. The Office of Housing and Urban Development offers a list of HUD-approved counseling agencies that offer free help. NeighborWorks America also offers a list of legitimate housing counseling agencies.
Finally, if you've been a victim of a foreclosure fraud, contact the FTC, your state attorney general or your local Better Business Bureau.