Forbearance Scams Surfacing in Minnesota

(KNSI) — Struggling Minnesotans whose mortgages are in forbearance may have a new problem to worry about.

The Minnesota Attorney General’s Office says scam reports are starting to crop up as the initiatives that allowed homeowners to pause their mortgage payments reach their limits and homeowners become more desperate. Those scams include phony offers to extend protections.

Katherine Kelly says there hasn’t been an onslaught of scam reports, but she fears they’ll soon be hearing of more, as some scammers are so good, homeowners may not realize it right away. “It takes a very long time for that person to realize it was a scam, because they think they can rest easy knowing that they’ve extended their forbearance, so they’re not monitoring things.”

She says that can raise the risk of falling into foreclosure.

Julie Gugin with the Minnesota Homeownership Center says a common scam right now involves dubious offers for a cash purchase of the property. Or, if the borrower is working with their lender on options, hackers might intervene with phony messages demanding immediate payment or a fee.

Gugin says knowing these can be stressful situations; it’s best to secure the help of organizations like the Minnesota Home Ownership Center that will guide you through the process without asking for a fee.

“We can help you navigate negotiations with your lender. We can help you understand your rights, during foreclosure and the process leading up to foreclosure.”

If a homeowner does decide to sell, Gugin says to work with a trusted real estate agent or professional rather than going with an unknown name that could turn out to be a scammer.

Earlier this fall, an estimated 1.5 million homeowners were in forbearance plans.

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MNC Reporter Mike Moen contributed to this report.

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