Scam Alert – Making Home Affordable Refinance Scams are Prevalent

Making Home Affordable scams are showing up all across the country. As with any plan that is put in place to help those in need, the number of people who see this as an opportunity to line their own pockets increases. If you are facing foreclosure, you are more likely to be targeted by Making Home Affordable scams. The people perpetrating these ‘loan  modifications’ or ‘refinancing’ schemes know that when foreclosure is looming, you are beginning to get nervous and are more likely to jump into a deal to save your home.

The $75 billion stimulus plan passed by President Obama was intended as a way to help homeowners who are having financial difficulty. Helping approximately 9 million homeowners to refinance by making incentives available to banks that would in turn ease up on their credit requirements would allow homeowners to refinance more easily.

Making Home Affordable scams are often hard to recognize because the perpetrators change them around often to keep one step ahead of law officials. How do you know if they are legitimate or not when someone contacts you about refinancing your home? The initial contact is normally over the telephone or by mail. They offer to help you to refinance your home at a much lower interest rate.

The homeowner will just assume the caller or letter they receive is from the legitimate plan to help them refinance. They are facing the prospect of losing their home and at this point, the Making Home Affordable scam looks like a lifeline that is being thrown to them as they are sinking.

The company will tell you they must have a fee before beginning the process of refinancing. The legitimate stimulus bill does not ask for an upfront fee and all fees associated with your refinancing will be given to you before you start the process.

If the company does not want to quote the interest rate to you from the beginning, you can figure this is one of the Making Home Affordable scams. The stimulus plan has a 2% rate that is guaranteed. The stimulus plan also does not ask for you to sign over your title to them for any length of time and in addition, they will not act as the middle man when it comes to payments. This company is not sending any of your payments to the lender.

These Making Home Affordable scams are known as an ’equity-skim.’ Watch out for companies that charge ’extra fees’ as well. You could end up paying hundreds of dollars or more for nothing and in addition, lose your home. If you are interested in the Making Home Affordable plan to help you refinance your home, go to their website or talk to your lender. This will ensure you are dealing with the legitimate plan.

For more information about homeowner assistance programs, please visit our “Find A Local Counselor” page, complete the form and we’ll be happy to assist you further.