Mortgage and Foreclosure Rescue Scams


Foreclosure Rescue and Loan Modification Scams

Don’t be a victim! Get the facts and help from a trusted source.


Foreclosure rescue fraud is a scam that allows con artists to prey on the vulnerability of desperate homeowners facing foreclosure.  Many so-called foreclosure rescue companies or foreclosure assistance firms claim they can help you save your home. Unfortunately, foreclosure fraudsters take your money and then do little – if anything – to actually get you a loan modification.  The City warns homeowners to be wary of people who pose as someone who can “rescue” them from foreclosure.


There are different types of scams:

Foreclosure Consultant and Loan Modification Scams

A person posing as an expert in foreclosure proceedings offers to help the homeowner escape foreclosure by pretending to be experienced in court proceedings, mortgage “short sales” back to banks, or loan modifications. The scammers generally accept money and do little, if anything, in return. Homeowners are left in the same position as before after having paid hundreds if not thousands of dollars to the scammer.


Sale-And-Lease Scam

A foreclosure rescue scammer pretends to have better credit than the homeowner facing foreclosure as well as the ability to get mortgages at lower rates than the homeowner could. The scammer then proposes that the homeowner “temporarily” sell the home to the scammer, who will pay lower monthly mortgage rates on the homeowner’s behalf. The scammer promises to let the homeowner rent the home until he or she is able to buy it back, but the property generally is never returned and the homeowner ends up being evicted.


You can protect yourself by knowing what to look for.

AVOID anyone who:

  • Asks for a FEE IN ADVANCE of providing you any services
  • GUARANTEES that they will stop a foreclosure or modify your loan
  • Tells you to STOP PAYING your mortgage and pay them instead
  • Advises you not to contact your lender, lawyer, or credit or housing counselor
  • Accepts payment only by cash, cashier’s check or wire transfer
  • Encourages you to lease your home so you can buy it back over time
  • Advises you to transfer your property deed or title  
  • Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale
  • Offers to fill out paperwork for you
  • Gives unsolicited phone call(s) or home visit(s)
  • Pressures you to sign papers you haven’t had a chance to read thoroughly or that you don’t understand, and fails to give you a copy of the document(s) you signed

Contact your lender or service immediately if you’re having trouble paying your mortgage or you have received a foreclosure notice. You may be able to negotiate a new repayment schedule.

Resources for Consumers:

The City of Chicago and Neighborhood Housing Services of Chicago (NHS) have worked together for years to help thousands of Chicago homeowners avoid foreclosure and keep their homes. They can help you understand where to turn for help and avoid loan modification scams that can take both your money and your home.

In Chicago, homeowners should call 311 to report a scam or 773.329.4125 to speak to a HUD certified housing counseling agency about loan modification and other mortgage payment solutions.

Consumers looking to find out additional assistance may also do so by clicking on the links below:

Neighborhood Housing Services of Chicago (NHS)

Loan Modification Scam Alert

FTC Mortgage / Real Estate Information

Mortgage Resources

 Supporting Information Facts

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