Avoiding Scams When Looking For Mortgage Payment Rescue
Companies that help you stop foreclosures, attorney-facilitated Loan Modification companies, and loss mitigation companies all target people who are in or who are facing foreclosure. Some of these companies may not be legitimate and may try to scam the consumer, making an already bad situation even worse. 
Before signing any papers, talk with an attorney or a state regulatory agency. It is important that you speak with someone who is familiar with the governing process of these companies. Also, make sure the business has filed a contract with your state and that they hold a valid state license. One more important thing, make sure they are willing to go through the United States Postal service for pickup and delivery of funds and documents. If not, it could be that they are just trying to skirt issues of mail fraud.
Get educated. Know what your options are. Have several different real estate agents give you a comparative market analysis (CMA) to see what your home would sell for. Seek the advice of an attorney if you want to pursue keeping your home.
Here are some of the common things many "scam" companies will say when you call and ask them if they can help you save your home.
1. "By signing the title of your home over to us, we can salvage your credit". Their reasoning is that when the foreclosure is issued, it will be recorded in their name.
Not So Fast - In truth, a foreclosure is always recorded against the borrower. It doesn't matter whose name is on title. The person who borrowed the funds is responsible. If you fall for this, you now owe money on something you no longer own.
2. "We will help you out of this situation by giving you some money AND paying your delinquent payments. Just sign the title to your house over to us."
Not So Fast- There is a lot of uncertainty here. If interested, proceed with caution and carefully consider this: Are you losing equity you may have built in your home? Can the buyer really cure the default? Will the buyer really make the payments? Do you want to be responsible for a loan on property you no longer own? There are a lot of maybe's and what if's in this scenario, so it's hard to make a call; be careful, and have an attorney on hand to review contracts before you sign them.
3. "Let us buy your home and you can lease it back from us. We'll make sure you can buy it from us later."
Not So Fast- Hypothetically, you sell your house for less than it is worth, rent it back for more than you should and then re-purchase it again later at a higher price. This doesn't sound like much of a bargain, does it? Now you've not only lost money, but you will most likely have a higher loan amount than you did before and probably at a higher interest rate. It will probably be harder to qualify for a loan and the payments will be more. Consider This? Sell the home on the open market or consider a hard equity loan if you have the equity in the property to do so.
4. "We can help you refinance your property and pay off some of your bills."
Not So Fast- Are these people really a loan modification specialists or do they have an ulterior motive and just want to make a buck on re-doing your loan - Remember, refinancing costs money - which is usually rolled into the new loan amount. This not only costs you money, but eats into the equity you have in your home.
If you are considering re-finance as an option, that is great, however keep in mind that when looking at lenders, get a Good Faith Estimate of cost and consider the total amount of the loan and repayment plan - Try not to get stuck on how much the monthly payment is, do your homework. Traditionally, these loans have higher interest rates and more fees.
5. "Foreclosures are my specialty. I know I can get you top dollar and help you out from the strain you've been under."
Not So Fast - There are agents who search the public records looking for people who are in pre-foreclosure. They give these names to investors who make ridiculously low offers, all in the name of "helping." Many times, if the seller had interviewed three agents from the area and gotten comparative market analysis' done on their homes, they would have gotten a better deal. Always do your homework and work with an attorney if possible.
6. "Declare Bankruptcy - Stop the Foreclosure."
Not So Fast - Foreclosures are NOT stopped by declaring bankruptcy; They are merely stalled which will give you a little extra time to organize your finances and put together a game plan. It is wise to contact a local attorney who specializes in bankruptcy and see if this is truly your best option. Wrong or uninformed choices can make the situation worse. Again, please do your homework and choose someone who is trusted and specializes in this area of the law. Don't get stuck with a general practitioner! A few probing questions should reveal their expertise and ask for references. Now is not the time for bargain shopping.
7. "In exchange for paying us to modify your loan, we can arrange to have your mortgage payments frozen for 3 to 5 months.
Not So Fast - Many companies ask for payment in advance for their assistance in stopping foreclosure and make false representations to homeowners. Some companies are not operating legally even though they offer money back guarantees. A number of these loan modification companies simply take the money and run, while others arrange only for you to receive the same unaffordable forbearance agreement you were already offered by your lender. Make sure you are working with a reputable company. Beware if they start offering rebates or making offers that sound too good to be true.
In closing, please remember to do your homework. Bad things happen to good people and if you find yourself in a difficult situation, don't lose your head. Speak to several experts and get several opinions. A knight in shining armor may end up being a nightmare.
If you are interested in more information on loan modification, please feel free to contact me and I will put you in touch with one of my preferred Loan Modification Experts that specialize in successful loan modification transactions. Together we will assist you every step of the way. I hope you have found this information useful.
The Loan Modification Series:
Loan Modification Series part 1 of 5 - Big Solution to A Growing Problem
Loan Modification Series part 2 of 5 - Are the Bank Willine to Play?
Loan Modification Series part 3 of 5 - Can a Loan Modification Assist in Avoiding a Foreclosure?
Be sure to visit my website http://www.wisconsinloantips.com for more great information -
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