Attorney General Todd Rokita warned Indiana residents on April 24 that offers for mortgage-relief services requiring upfront fees are likely scams. Rokita said, “Hoosiers need to be aware that it’s illegal for companies to charge you upfront for helping you find ways to pay your mortgage. Don’t fall victim to fraudsters trying to take advantage of your concerns about foreclosure or falling behind on payments.”
The warning comes as Indiana has ranked near the top in the nation for foreclosure rates, making homeowners in the state a frequent target for scammers. The Attorney General’s office outlined several red flags associated with these fraudulent offers, including instructions to stop communicating with lenders, requests for payment through cashier’s check, wire transfer or mobile payment apps, and efforts to convince homeowners to transfer their deed.
For government-backed loans such as those insured by the Federal Housing Administration (FHA), Veterans Affairs (VA), U.S. Department of Agriculture/Rural Housing Service, or conventional loans backed by Fannie Mae or Freddie Mac, federal law requires mortgage companies to review loans for free alternatives to foreclosure. These options may include loan modifications, repayment plans or forbearance.
Rokita advised residents that they never need to pay a third party for these services and should contact their lender or a free HUD-approved housing counselor directly if they are seeking assistance.
Victims of mortgage relief scams are encouraged to report incidents either online at https://www.indianaconsumer.com or through the Federal Trade Commission at https://reportfraud.ftc.gov.
