Military service members are not immune to the troubled economy in the United States. Families can accumulate debt and suffer from financial distress when a military member is deployed. A recent report shows that upon returning home, many of these military members are targets of lending fraud.
Tennessee families and service members should be aware that lenders are seeking out veterans in loan-modification lending scams that can lead to future financial distress and loss. If you are behind in mortgage payments, there may be other options including foreclosure defense or bankruptcy.
There are countless lending schemes that target soldiers who have sought out mortgage assistance under the Home Affordable Modification Program (HAMP). Lenders may target service members for the following reasons:
- Guaranteed paycheck. Soldiers are paid by the government and are not in danger of being laid off.
- Young, naïve homeowners. Many soldiers are young adults who lenders see as unsophisticated and unable to spot a scam
- Military culture makes loan modification appealing. The military requires that members keep their finances in good order. This often inspires borrowers to take quick action, even without reading the fine print.
There are signs to watch out for. Fraudulent lenders will usually guarantee a modification in exchange for an upfront fee. Do not pay a loan service agency without having a clear understanding of the consequences. Many lenders will offer other services in collaboration with veterans' groups. Just because they are affiliated with an organization, does not make it legitimate. Always ask questions, know what you are signing, and seek professional resources when making major financial decisions.
Source: CBS News, "Loan scams target U.S. soldiers," Ilyce Glink, June 7, 2012.