Foreclosure Relief Scams via Phone Calls
How callers posing as mortgage relief specialists prey on homeowners facing foreclosure, collecting upfront fees for help that never materialises.
Part of: Foreclosure Relief Scams
Last reviewed: 8 June 2026
Homeowners in foreclosure are among the most financially and emotionally stressed consumers, and fraudulent callers know exactly how to reach them. Notices of default and foreclosure are public record in most states, meaning anyone can compile a list of people who are behind on their mortgages and call them with an offer of help at the moment they are most desperate.
The caller presents as a foreclosure specialist, housing counsellor, or mortgage negotiator who can stop the foreclosure, lower monthly payments, or arrange a loan modification. An upfront fee is collected — sometimes framed as a 'retainer' or 'processing charge' — and then the promised intervention never occurs, while the foreclosure timeline continues.
This guide covers how these calls are structured, the legal prohibition on upfront fees for mortgage assistance, and where to find genuine help.
How this scam works on phone calls
The caller contacts a homeowner who has received a notice of default or whose mortgage is publicly recorded as delinquent. The caller describes a programme or negotiation service that has a track record of stopping foreclosures and securing loan modifications, and names what sounds like a believable government or bank-affiliated entity.
An upfront fee — ranging from a few hundred to several thousand dollars — is required before work can begin. The caller may instruct the homeowner to stop communicating with their mortgage servicer and to redirect all payments to the 'negotiator' rather than the lender, which accelerates the foreclosure rather than preventing it. After the fee is paid, the caller becomes unresponsive or produces paperwork that the lender never agreed to.
Some callers advise homeowners to sign over a deed or quit-claim deed as part of the 'rescue plan', which can transfer ownership of the home to the scammer while the homeowner continues to believe they are getting help.
Common red flags
- Caller requests an upfront fee before providing any assistance — this is illegal in most US states for mortgage assistance
- Instruction to stop communicating with your mortgage servicer
- Request to redirect mortgage payments to the caller rather than the lender
- Advice to sign documents transferring any ownership interest in your property
- Caller obtained your number without you having sought out their service
- No written agreement detailing what specific services will be provided and by when
How to protect yourself
- Contact a HUD-approved housing counsellor at no cost by calling 1-800-569-4287 or visiting hud.gov/findacounselor
- Understand that charging upfront fees for foreclosure assistance is illegal under the FTC's Mortgage Assistance Relief Services rule
- Continue communicating directly with your mortgage servicer about hardship programmes and forbearance options
- Never sign documents you have not had independently reviewed by a HUD counsellor or attorney
- Verify any counsellor or negotiator through your state's housing finance agency or bar association
How to report it
- Report to the FTC at reportfraud.ftc.gov — the MARS rule prohibits upfront fees
- File a complaint with your state's Attorney General consumer protection office
- Contact your state's Department of Real Estate or Financial Institutions if a real estate licence is being misused
- Report to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint
Frequently asked questions
Can anyone legally charge me a fee upfront to help with my mortgage?
Under the FTC's Mortgage Assistance Relief Services rule, companies cannot collect fees until they have delivered a written offer from your lender that you have accepted. Any upfront fee before that point is illegal.
What is a HUD-approved counsellor and how do I reach one?
HUD-approved housing counsellors are free or low-cost non-profit advisors certified by the US Department of Housing and Urban Development. Call 1-800-569-4287 or visit hud.gov/findacounselor to find one near you.