The high rate of foreclosure filings in the Phoenix area as well as throughout the state tell us all that there are a lot of homeowners having trouble making their payments.  Unfortunately, there are always unscrupulous people who are willing to take advantage of those in trouble.  The FBI and local law enforcement agencies all over the country are well aware of the increase in loan modification scams.  In fact, loan modification scams have become so prevalent, that Congress has just passed legislation giving the FBI a boost in combatting the problem.

    *      The FBI will be setting up task forces to deal with the problem in all 50 states.
    *      The FBI will ramp up investigations of mortgage and financial fraud.
    *      The bill will provide $75 million to the FBI to hire 190 special agents and more than 200 professional staff and forensic analysts.
    *      The FBI is expected to double the number of mortgage fraud task forces, from the current 26 to more than 50 nationwide.

Loan modifications are probably the best bet for homeowners who have missed one or more payments in Phoenix and its surrounding communities.  However, distressed homeowners must beware and be aware.

    * Beware of loan modification companies asking for out-of-pocket money.
    * Beware of loan modification companies that guarantee a loan modification.
    * Beware of loan modification companies that guarantee a reduction in your loan balance.
    * Beware of loan modification companies that guarantee a reduction in your payments and/or your interest rate.
    * Be aware that even a money back guarantee can be a scam.  Although, the company may return part of your out-of-pocket fees, they may not have really earned any payment.
    * Be aware that loan modifications are free; they do not incur any lender fees.
    * Be aware that not even your lender can guarantee a loan modification, lower payments or interest rates.
    * Be aware that you must complete a loan modification package from your lender, a company cannot do this for you.
    * Be aware that you must qualify for a loan modification.
    * Be aware that you must provide income documentation proving you qualify for the agreed  mortgage payment.
    * Be aware that free help is available through Making Homes Affordable for homes financed by Fannie Mae and Freddie Mac.
    * Be aware that free help is available through HUD approved counselors, no matter your loan type.
    * Be aware that lenders receive incentive payments from the government to help you stay in your home through a loan modification.
    * Be aware that most people are qualified to handle the loan modification without assistance.

If you truly do not feel comfortable with the a loan modification process and feel that you need help, then you should seek help; after all it is free.  Start with the Arizona Foreclosure Information Workbook or speak with a HUD approved counseling agency.

Larry Luenser, your Phoenix real estate expert!
 
Note - If you have been a victim of a loan modification or foreclosure scam, please contact the FBI:
FBI Phoenix office
FBI Offices in Arizona