The FTC says the fraud works like this: In exchange for an upfront fee of several hundred dollars, so-called forensic loan auditors offer to review the homeowner’s mortgage loan documents to determine whether the lender complied with state and federal mortgage lending laws. If a violation is found, the “auditors” say their findings can be used to avoid foreclosure, accelerate the loan modification process, reduce the loan principal, or even cancel the loan.
Nothing could be further from the truth, according to the FTC and its law enforcement partners. Forensic loan audits don’t help homeowners with loan modification or any other foreclosure relief.
Through the national Loan Modification Scam Alert campaign, NeighborWorks America is working with the FTC and other federal, state and local agencies to help homeowners facing foreclosure to spot loan modification scams, find trusted help and report illegal activity to authorities. NeighborWorks also urges homeowners who need help to go to findaforeclosurecounselor.org or call 1-888-995-HOPE (4673) to get legitimate assistance from a HUD-certified housing counseling agency.