Beware of Mortgage Loan Modification Scams Targeting Chapter 13 Debtors

Scammers are getting more creative. A new scheme targets Chapter 13 bankruptcy debtors with fake loan modification offers. These emails appear to come from mortgage servicers. But they are not legitimate. These mortgage loan modification scams are designed to trick debtors into giving up banking information or wiring money.

Here’s what’s happening: Some Chapter 13 debtors have received emails offering a loan modification under a so-called federal mortgage assistance program. The email promises reduced payments and a lower interest rate.

It also includes urgent language that pressures the debtor to act quickly or risk losing the offer. The contact in the email is not connected to any real mortgage servicer. Instead, the name and phone number go straight to the scammer.

Once the debtor calls, they are told a negative escrow balance must be cured before the modification can move forward. The scammer then asks for banking information or provides wiring instructions for payment. These payments go to fraudsters, not the mortgage company.

Here is a red flag example of one such email subject line:

Subject: Loan Modification Assistance.

The body of the email may claim:

You qualify for a 25% reduction in your monthly payment.
Your new interest rate will be 2.25%.
Past-due payments will be moved to the end of the loan.
Trial payments must be made on time, or the plan will be canceled.
A “federal attorney” is assigned to approve your modification.
Negative escrow must be paid immediately.
A contact named “Mike Jones” is listed with a phone number like (888) 405-4748.

This type of message may look official, but it is not. These offers do not come from the mortgage servicer. They are scams targeting vulnerable people already struggling with debt.

How to Stay Safe

Verify any loan modification offer. Never respond to an unfamiliar email.

Instead,  call your mortgage servicer using the contact number on their monthly statement or mortgage coupon. That is the only safe and reliable source of contact information.

Do not call any number listed in the suspicious email. Do not provide banking information over the phone or through email to an unknown party. And never send wire transfers unless you confirm the instructions through a verified source.

It’s easier to identify and avoid scams if you know what to look for.

What You Should Do If They Receive a Suspicious Email

If you receive one of these emails, report it. Contact the mortgage servicer directly and inform them about the message. If possible, save a copy of the email and forward it to a legal professional handling the bankruptcy case. It’s essential to keep records and help identify patterns that may assist law enforcement or bankruptcy trustees in tracking down fraudsters.

This scam is dangerous. It preys on people who are already under financial stress. Acting quickly and with caution is key. Legal professionals, trustees, and debtors must work together to prevent harm and report suspicious activity.

Final Thoughts

Chapter 13 debtors need to stay alert. Scammers are always looking for new ways to exploit confusion and urgency. Always check with the real mortgage servicer before taking any action. When in doubt, confirm through known, trusted contacts—not links or phone numbers in a suspicious email.

If a client receives one of these scam messages, sharing the details with professionals monitoring these fraud trends is helpful.

If you’re concerned about mortgage loan modification scams or need information about bankruptcy, we can help. For more information or to schedule a consultation to discuss your situation, contact R. Flay Cabiness, II, P.C. at (912) 417-5041 (Brunswick, GA); (912) 809-2141 (Hazlehurst, GA) or; (912) 324-3176 (Jesup, GA) to schedule a consultation.