Finding a source of relief is very important for any homeowner that is having a difficult time keeping up with their monthly responsibilities. Whether your hardship be due to an increase in household expanses, job loss, loss of income, or an adjustable rate mortgage that has skyrocketed out of control, getting assistance form your lender is crucial to help you stay in your home and prevent foreclosure. We find that many borrowers in this position tend to just freak out and make a decision before thoroughly thinking about ti first.
Many times when a homeowner is searching for ways to save their home from foreclosure they will come across loan modification or foreclosure prevention companies. While there may be a few legitimate firms out there that offer this type of service, there are literally thousands of predators out there who are looking to suck the money out of homeowners in distress. These companies will often times pay thousands of dollars to make there advertising look legit and typically guarantee assistance in exchange for a fee. Please homeowner be very wary of any firm charging a fee to perform a loan modification and always to intense research before making a decision.
If you are not aware, a mortgage modification involves changing the terms of your current loan to help lower the monthly payments and make them more suitable for your situation. Options to reduce the payment may include a lower interest rate, changing the loan from an ARM to a fixed rate, or sometimes they will even extend the term of the loan to decrease the monthly payment as much as possible. Again, there are definitely some legitimate for profit companies out there, but the fact is there are much more of these companies who can do nothing that you cannot accomplish on your own. And some of them will do absolutely nothing once they obtain the fee for their service.
Below are five common tips used to help a homeowner avoid these unscrupulous practices:
1. Try to work only with non-profit or HUD-approved counselors.
If you are looking for assistance to help save your home from foreclosure, be sure the company is a reputable non-profit agency or is on the Department of Housing and Urban Development’s list of approved agencies and counselors. We suggest you visit HUD’s website for an easily searchable list of HUD-approved housing counseling agencies, or call 877-HUD-1515 (877-483-1515) for more information. If you happen to be approached by a foreclosure prevention counselor like many people are, whether it be by mail, phone, or in person, make sure they are approved by HUD before taking on their services.
2. Do not pay someone thousands of dollars to prevent foreclosure.
No one should have to pay hundreds or even thousands of dollars to get help form a legitimate counselor. Pretty much all HUD-approved counseling agencies offer their service free of charge, or some may proved counseling at a very low cost. Please do not pay anyone an upfront fee before the providing services are performed. Therefore, you should not have to pay a dime before you know something will actually be done to assist you.
3. Stay away from anyone who guarantees a modification or foreclosure prevention.
A legitimate and reputable agency will not tell you that foreclosure prevention is guaranteed, no matter what your situation may be. Working with a reputable HUD-approved counselor may raise chances of you saving your home, but be very wary of those who promise it will be done. Try to get all details of the transaction and all services performed in writing first.
Any company that guarantees they can prevent foreclosure is a dead giveaway they may be a scam.
4. Thoroughly read and understand anything you sign.
Do not let any company or counselor pressure you into signing paperwork before you have had a chance to thoroughly go over it. Be wary of anyone attempting to fill out paperwork for you unless you are there to oversee it. Also make sure to never sign a form that is blank. If they are trying to force you into signing a form you do not agree with or understand, that is a good sign to run!
If a company is offering to take over the title of your home make sure to consult with an attorney right away before signing anything.
5. If their services sound too good to be true, they probably are!
Anyone who is guaranteeing a modification or promises they can reduce your principal balance value is a scam!
If you feel you have been a victim to one of these scam artists, seek help right away and report the firm that scammed you. To make a complaint please check out the websites listed below:
LoanScamAlert
For CA homeowners
Find your state’s Attorney General here
http://www.stopfraud.gov/
http://www.ftc.gov/
