Napa County DA Warns Homeowners About Loan Mod, Foreclosure Scams

NAPA COUNTY, CA — Napa County District Attorney Allison Haley issued a consumer alert Tuesday to Napa County residents regarding coronavirus-related fraud against homeowners. As homeowners seek relief from the financial impacts of COVID-19, loan modification and forbearance are ways to potentially save one's house.

However, loan modification and foreclosure rescue scams are currently circulating around the country, the DA's Office said.

The DA's Office does investigate and prosecute fraudulent practices, but says awareness and education are the best protection against scams. To protect themselves, residents should verify that any person they share financial information with is licensed, legitimate and qualified.

The DA's Office is publishing the complete California Department of Real Estate Fraud Warning notice on its webpage and is encouraging residents to be cautious and to read the notice "to help prevent unscrupulous criminals from making your situation worse."

According to the DA's Office:

"A loan modification or forbearance is where you and your lender or loan servicer agree to modify the terms of your home loan. This could be a lower interest rate, extension of the length of time to pay back the loan, reducing or postponing some of your payments, or any other change of loan terms.

"Scammers often falsely claim that they can guarantee a loan modification or forbearance or stop your foreclosure. They make bold statements about their successes, publicize their supposed expertise, ask for money up front, and then take your money and leave you in worse shape than before. Remember, if it sounds too good to be true, it probably is too good to be true. Legitimate loan modifications are not always possible for every homeowner."

Homeowners should contact their lender directly, which is free; or consult a free counselor through the U.S. Dept. of Housing and Urban Development; or work with legitimate, licensed and qualified representatives, including a California licensed real estate broker and/or a licensed attorney.

Prior to working with a loan modification or foreclosure rescue company or anyone else who says they are an agent, broker or attorney, residents are encouraged to check the company or person's license records, and to look the company or person up on the Better Business Bureau website to see if they've had any complaints filed against them.

It is illegal for anyone to charge any advance, up-front or retainer fee for loan modification or forbearance services, the DA's Office said.

Anyone who has been the victim of such a scam, or who has information regarding a potential illegitimate loan modification or foreclosure rescue, is encouraged to immediately file a complaint with the DA's Office by going to Countyofnapa.org/da/consumerdivision or by calling 707-253-4059.

"Even though our office cannot represent individuals, we may, on behalf of the public, investigate or prosecute someone who has engaged in illegal conduct," Haley said.