We all know they are out there–people who feed off the desperation of others. The current housing market is no different. In fact, it is a perfect environment for the birth of new schemes to take your money from you, no matter that you are just trying to save your home from reverting to the bank.
In my last post I discussed some of the latest scams that are out there and how to beware of them. The Obama administration has been looking into this and just a few days ago the Treasury Department and Department of Housing and Urban Development (HUD) announced that they will be instituting policies to crack down on people who are perpetrating such scams by attempting to charge victims for foreclosure counseling.
I read a great article that provided some simple questions you can ask any organization or person who is attempting to help you avoid foreclosure by counseling. I think these are great questions to ask and although not foolproof they will hopefully give you a feel for whether the organization is legitimate. Here are the questions:
1. How much does your service cost? Remember, as I pointed out in my last post on foreclosure scams, there is a range of free counseling out there. NEVER pay someone to counsel you, unless it is your attorney or your accountant. HopeNow (1-888-995-HOPE), HUD (www.hud.gov/foreclosure) and Acorn (http://acornhousing.org) are the top three free counseling services in my opinion.
2. How long has your company been in the business of foreclosure prevention counseling? You can use your judgment here. Although length of time in business is not always better it allows time for relationships to be created that can help you (see below).
3. Do your counselors have a “direct pipeline” to the mortgage modification department of your lender or service provider? Some counselors dealing in mortgage modification and other foreclosure prevention counseling have long established relationships with loss mitigation departments of various lenders. These relationships go a long way in helping you, as they provide the counselors a direct line to the right people. This can obviously speed the process along and prevent long periods of waiting to hear back, only to find that you needed to contact someone else.
The article mentions that the firm may tell you that they DO have such a relationship, and advises you to get specific by asking if they have such agreements in writing, and also if they work with a specific person from YOUR lender’s office who has authority to make decisions regarding your account.
4. Does the company have a direct connection with someone who is a decision maker or who can override decisions made by the loss mitigation department? Again, the relationship established between the counselors and the “right” people can make all the difference between getting a work out and getting closer to being kicked out of your home.
5. Will the counselor stay with you throughout the entire process? This is important because the counselor will know your case and all the details that are involved. If you are tossed around to various counselors obviously the benefit is not the same. Having dealt with lenders on short sales as a Realtor I KNOW first-hand how frustrating it can be to have to explain your point every time you call to a different person, oftentimes getting completely different answers (or feeling like you are in the Twilight Zone because you know you went over this before).
Keep in mind that if you are unemployed and will be unable to make payments on a newly modified mortgage, speaking with a counselor may not offer you any consolation. You need to still be able to show that you will be able to afford the new loan. If you are in this position than you need to pick up the phone and get help. Don’t wait until it is too late and your lender sends you a notice of sale.
For more information on options to help avoid foreclosure and links to helpful programs and information, you can read my book, Mortgage Walkaway Options. Visit http://MortgageWalkawayOptions.com.
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