As the number of foreclosures rises and the number of frustrated borrowers try to re-negotiate their loans, there has also been a dramatic increase in the amount of loan modification scams turning up both on and offline. Don’t be a loan modification scam victim.
While it is worrying to think that you may be getting cheated, there are some definite warning signs to look for when inquiring about a modification. The following are some examples (not intended to be a complete list) of signs that a company may be a scam.
- You are offered a guarantee of a successful modification.
- You are offered a strong chance of successful modification without being asked any details of your situation and circumstances
- You are required to pay a large fee upfront when your file has not been reviewed (different from a licensed attorney’s fee)
- You are asked to transfer title or sell your house by a “foreclosure rescuer”
- You are asked to “pass your payment on” through a third party other than your lender or loan servicer
- You are forced into terms that are not beneficial to either you or your lender
- You are promised a certain term, interest rate, or principle reduction amount (especially if it has not been verified by your lender or put into writing)
Be alert when contacted by a loan company – by phone, mail or online. Check them through reviews or the Better Business Bureau. Always deal with a reputable firm.