Homeowners in risk of foreclosure can face a lot of stress and worry. Some dishonest companies are taking advantage of those desperate for help paying the mortgage by claiming they can guarantee to stop a foreclosure, but fail to help the homeowner in any way. Often they will ask for a large one-time up-front fee to take care of a loan modification, and then walk away with your money.
Many frauds begin with a person or company that pretends to be a government agency or program. They may mimic government websites and program names.
Other scams include getting a homeowner to sign over the title of his or her home, then pay the new owner in a "rent-to-own" payment plan. The scammer will then raise the rent or use other methods so you can't make the payments, leaving them free to sell the house. In other cases, the scammers will ask you to sign paperwork to make your mortgage current. In reality, you are signing over the title of your house for a so-called "rescue" loan.
What to do When Discussing a Home Loan Modification
Home loan modifications can be legitimate and beneficial if handled by honest government programs or attorneys.
Here are a few helpful tips to know if you're dealing with a legitimate organization:
- Get the name of the person/company, and research them. Know with whom you are talking, and get contact information.
- Watch out for guarantees to save your home. It is possible to successfully modify your home loan, but legitimate companies will not make exaggerated claims or guarantees.
- Don't feel pressured to sign something you haven't read or understand fully - when in doubt, contact an attorney who can tell you what you're signing
- Watch out for any person or company that asks you to pay them instead of your mortgage in exchange for a loan modification.
Loan Modifications are One of Several Potential Options
Home loan modifications are not the only option. Deeds in lieu of foreclosure and bankruptcy can also be good choices for struggling homeowners. If you are concerned with foreclosure contact a bankruptcy attorney.
While it can be difficult to understand the steps you should take if you are behind on mortgage payments, legitimate help is out there.
