Desert Underwater: Sorting Fact from Fraud - 8 News NOW

Desert Underwater: Sorting Fact from Fraud

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LAS VEGAS -- You are more likely to be the victim of mortgage fraud in Nevada than in any other state, according to one research firm.

Fraud takes many forms, from scams in the loan modification process, short sales, rentals, and even one that promised to eliminate your mortgage altogether. So how do you sort through the fact from the fraud?

If you chose to go the loan modifications route, you may not need to pay someone to do it for you. Try it yourself first and make an appointment with a HUD-approved housing counseling agency. They can assess your situation for free and help to point you in the right direction.

If you do choose to seek help from a loan modification specialist, do not pay anything up front. It is against the law for loan modification companies to collect a penny until they get you the result you want.

They must also be licensed in Nevada, so check that too.

Attorneys can require money up front and you want to make sure that they also hold a Nevada license.

Also, beware of advertisements guaranteeing principal reductions. Most attorneys say the banks simply aren't giving them. A true principal reduction is the exception, but not the rule.

"People are desperate and they're willing, just on sheer hope, to believe the lies that they're being told. They're literally down to their last dollar and for every honest person that's really trying to help, there's 10 of them out there now that are trying to exploit the system to make a buck," said Chief Deputy Attorney General John Kelleher.

It is really easy to get overwhelmed with the process, but you can't afford not to do your homework. Check out the resources on our website.

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