CONSUMER AFFAIRS: Forensic mortgage loan audit scams

According to the Federal Trade Commission in a recent Consumer Alert ("Forensic Mortgage Loan Audit Scams: A New Twist on Foreclosure Rescue Fraud"), foreclosure "rescue" businesses may use half-truths and outright lies to sell services promising mortgage relief.

The businesses allegedly exploit homeowners by pitching forensic mortgage loan audits requiring large upfront fees in exchange for a review of your mortgage to see if your lender complied with mortgage lending laws.

As part of the pitch, homeowners are apparently told the audits can be used to prevent foreclosure, modify mortgages or cancel loans.

The FTC says it has found no evidence that forensic loan audits will help you get loan modification or any other foreclosure relief.

The federal agency urges homeowners to be careful of businesses that guarantee they'll stop the foreclosure process no matter what your circumstances are, or tell you not to contact your lender, lawyer or credit or housing counselor for advice. 

Be careful of businesses that seek to large collect upfront fees before providing services and accept payment only by cashier's check or wire transfer.

Watch out for high pressure sales techniques that demand that you act right away. 

Resist calls that you not contact people you trust for advice. 

Don't sign documents that you do not understand. Seek professional advice before entering into real estate transactions affecting your home.

To read the full FTC Consumer Alert, go to http://www.ftc.gov (type "Forensic Mortgage Loan Audit Scams" in the search area).

Opinions are solely the writer's. Joseph Pellicciotti is a lawyer, professor and vice chancellor at Indiana University Northwest.