Having friends and neighbors who've been scammed as well as seeing advertisements ALL over the place for companies offering loan modification, debt consolidation, etc, all noted that their "team of lawyers (please note that the State Bar of CA is asking licensed attorneys NOT to affiliate themselves in any way with these "teams") will be working on the mod.
That said, I have decided to print a top 10 list of warning signs for loan modification scams - and if ANY of these have happened to you, please report the company you are working with to the Better Business Bureau (you can also look up their rating online as well) and CALL the bank yourself or hire a real estate professional or loan officer to help you - there are also organizations who will help you for FREE! I help my clients for free as a courtesy and I will disclose upfront that if the client cannot afford what the bank is offering, my suggestion is a short sale! Now keep in mind that a lot of these companies will only make money if they (1) charge you up front (#1 sign it is a scam) OR (2) sell your home as a short sale - so what is their motivation to help you????? The only thing they want is a short sale - otherwise they work for free! And folks, as we all know - nothing is FREE in this world...........
TOP 10 Warnings are as follows:
1. "Pay us $2,500, and we'll save your home and get you a VERY low monthly payment." Some legitimate housing counselors may charge small fees, but fees that amount to thousands of dollars are likely a sign of potential fraud - especially if they are charged up-front, before the "counselor" has done any work for you. Be VERY cautious of companies that require you to provide a credit card, cashier's check or wire transfer before they take any action on your behalf.
2. "Sign over your home, and we'll let you stay in it." Be very suspicious of someone who offers to pay your mortgage and rent your home back to you in exchange for transferring title to your home. Signing over the deed to another person gives that person the power to evict you, raise your rent, or sell the house. Although you will no longer own your home, you will still be legally responsible for paying the mortgage on it - all you have done is give the home away - not the financial responsibility for it.
3. "Stop paying your mortgage." Do not trust anyone EVER who tells you to stop making payments to your lender, even if that person says it will be done for you. Think really carefully about this - if you stop making your payments, what typically happens?
4. "If your lender calls, don't talk to them or refer them to us." Your lender should be your first point of contact for negotiating a repayment plan, modification, or short sale. It is vital that you stay in close communication with your lender, so they understand your circumstances - who better than you truly does understand what your circumstances are?
5. "We guarantee we will save your home." Be VERY CAUTIOUS of guarantees that a person or company can stop a foreclosure and allow you to remain in your house. Unrealistic promises are a sign that the person making them will not consider your particular circumstances and are unlikely to provide services that will actually help you.
6. "Your lender never had the legal authority to make a loan." Do not listen to anyone who claims that they know of secret laws that can be used to eliminate your debt and have your mortgage contract declared invalid. These scammers use sham legal arguments to claim that you are not obligated to pay your mortgage. These arguments don't work, they are fraudulent and waste precious time that you may not have!
7. "Just sign this now; we'll fill in the blanks later." NEVER EVER EVER sign a contract without making sure all of the information is filled out and complete and be sure to take the time to read and understand everything you sign. Never let anyone else fill out paperwork for you. NEVER let anyone pressure you into signing anything that you don't agree with or understand.
8. "Call 1-800-Fed-Loan." This may be a scam. Some companies fool the home owner into believing that they are affiliated with the government. Some will also tell you that you must pay them high fees to qualify for government loan modification programs. REMEMBER that you do not have to pay to participate in legitimate government programs. All you need to do is contact your lender to find out if you qualify as there are certain restrictions for loan modifications. As some may have read today, it is not always in the banks best interests to do a loan modification and thus they would prefer to foreclose.
9. "File for bankruptcy and keep your home." Filing bankruptcy MAY temporarily stop foreclosure. If your mortgage payments are not made, the bankruptcy court will allow your lender to foreclose on your home. Be aware that some scammers will file bankruptcy in your name, without your knowledge, to temporarily stop foreclosure and make it seem as though they have negotiated a new payment agreement with your lender. It is a temporary measure that may give you another 3 to 6 months in the home - a home that is no longer yours!
10. "Why haven't you replied to our offer? Do you want to lose your home?" Some companies will use high-pressure tactics which is a red flag. If someone continually contacts you and pressures you to work with them to stop foreclosure, do not work with that person, do not provide them any of your information 0 hang up the phone! Legitimate counselors do not conduct business in a threatening manner. Be sure to look up the company at the BBB OR any of the scam sites available online.
To save someone else the trouble, please be sure to report ANY suspicious activity to the federal agencies, such as the Federal Trade Commission, and to your state and local consumer protection agencies. Reporting con artists and suspicious schemes helps prevent others from becoming victims.
If you have any questions on the above information or need help with your loan modification or short sale, please call or email me. I'd be more than happy to help - for free!
Comments(0)