I have to admit, I understand how some mortgage brokers could have become caught up in providing creative financing to many innocent buyers with no money and little ability to make monthly mortgage payments. After all, I suspect that many lenders trusted the fact that these buyers understood that they would be paying more on their mortgage payment than their current rent payment. I am certainly not justifying the lenders that are now being called "predatory lenders" I am simply stating that I can see how it can happen.
What I don't understand is the new generation of so-called predators under the guise of a "loan-modification" company. These are companies that ask for money up front to negotiate with banks. The problem with these companies is they cannot guarantee their promises of reducing the interest rate or saving foreclosure and many if not all do not refund the upfront money. There is no doubt that these companies work hard in their attempts, and there are definitely ways to modify your loan, however, if you are financially strapped you should not have to pay someone to do it. The best way to modify your loan is directly through your bank. There are also some wonderful non-profit organizations that can help you as well. You can find a non-profit counselor to assist you at the FHA website: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm
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