Recently, the U.S. Treasury and the Consumer Financial Protection Bureau issued an important warning to members of the United States armed forces. The warning told members of the military to be aware of the potential for loan modification scams. Members of the armed services may be at particular risk for these types of scams due to their financial situations and other risk factors.
Some of the signs that a specific loan modification program or offer may be a scam include using the name or logo of a government agency or non-profit group without permission, charging an upfront fee in exchange for a guaranteed modification, and advertising extraordinarily high rates of successful loan modifications.
Members of the armed services are at significant risk for these types of scams for a variety of reasons. According to a 2003 National Consumer Law Center report, scammers like to prey on military personnel because members of the armed services have a steady and predictable paycheck, are often young adults who may be not be financially savvy, and because of the military culture that encourages members of the armed services to keep their finances in good order.
Despite these scams, there is help available for Minnesota military personnel and their families. Active military personnel and veterans are encouraged to contact the U.S. Department of Housing and Urban Development, the U.S. Department of Veterans Affairs and/or a Minneapolis debt relief attorney for help if they are having trouble paying their mortgages or have concerns about a loan modification proposal.