Mortgage Scam Against People Who are In Chapter 13

I was so disappointed this past week to learn about a new scam that will cost my Chapter 13 client money they cannot afford to lose.

I have some clients who received a solicitation in the mail from a company in Florida that “guarantees” that they get their mortgage payment lowered through a loan modification. All my client had to do to take advantage of this great offer was to send this company $600. This would be bad enough if the story stopped there. Unfortunately, it does not.

My clients then called this company to find out the next step.  This scam company told my clients that they need to quit making their mortgage payments so that the mortgage company would be motivated to enter into a loan modification. My client accepted this bad advice even though I tell all of my chapter 13 clients that they must make all future mortgage payments on their house if they want to keep it. In addition, I make them sign three different documents stating they understand that they must keep their future mortgage payments current.

I asked my client who mailed the 600 to the scammers and quit making their mortgage payments, “Why did you do this after I told you that you must keep your mortgage payments current and even made you sign documents stating that you understood that all future mortgage payments must be paid directly to the mortgage company?” They responded with, “but their offer was guaranteed.”

After missing three months of mortgage payments, the mortgage company has responded by filing a Motion for Relief from the Automatic Stay so that they could get permission from the court to start foreclosure proceedings. In our district, even though we will be able to work out a consent order with the mortgage company, the creditor can charge my client $850 for having to file the Motion for Relief. In addition, there will be late fees.

Any person who is in Chapter 13 and receives an offer in the mail that sounds to good to be true should schedule an appointment with their bankruptcy attorney. Let your attorney review the offer so that she can forward the information to the United State Trustee.

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