“Let me put it this way. It’s like food stamps,” said the mortgage modification telemarketer trying to talk consumer advocate and Red Tape Chronicles blogger Bob Sullivan into a new loan. Following the trail of who this guy works for lead Sullivan to discover a new kind of mortgage modification scammer.

Many states have outlawed collecting upfront fees for loan modifications – talking people into forking these over are the heart of the scam – but there is an exception for attorneys. So what these places are doing is hire a few lawyers who just provide a storefront face while the loan mod ripoff continues in the boiler room.

Beware of any service that asks for a hefty upfront fee, it’s often the sign of a con. And if your mortgage is in trouble, don’t listen to some guy who cold calls you on your cellphone. Instead, phone a HUD-approved nonprof no-fee housing counselor.

Would you buy a mortgage from a car salesman? [Red Tape Chronicles] (Photo: travelator)

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