New Loan Modification Scams Detailed in Crain’s

A new Crain’s article details fraudulent loan modification organizations that target mortgage holders. Jessica Attie, co-director of South Brooklyn Legal Services’ (a program of Legal Services NYC) Foreclosure Prevention Project, is one of the individuals consulted in the article about this increasingly common scam that she calls an epidemic. These firms bombard homeowners with mailings and phone calls, scour public records for homeowners whose properties are in danger of being foreclosed, and advertise on Craigslist.

At best, loan modification companies provide homeowners with a service they
could get for free from their lenders or nonprofit housing counselors, says the
U.S. Department of Housing and Urban Development.

Frequently, they ask homeowners for thousands of dollars up front, which is
illegal in 12 states, including New York, unless the fee is made to a lawyer or
nonprofit. As part of the sales pitch, homeowners are often advised to stop
making mortgage payments, putting their homes in further jeopardy of
foreclosure.

Often, the companies do little to facilitate an affordable mortgage
modification, advocates say.

Firms bombard homeowners with mailings and phone calls; they scour public
records for homeowners whose properties are in danger of being foreclosed, and
they advertise on Craigslist.

“You see one here and there, and then all of a sudden you realize it's an
epidemic,” says Jessica Attie, co-director of South Brooklyn Legal Services'
Foreclosure Prevention Project. “They sound very appealing. It's hard for people
to know many are not legitimate companies.”

To read the full article by Daniel Massey in Crain’s, click here.