This 2010, millions are at risk of facing foreclosure on their homes, which is why loan modifications are in huge demand.
However, at a time when most are in desperate need of help, scams abound to rip people off their remaining money and even their homes.
Loan modification scams are not often easy to identify.
Here are some valuable hints to indicate whether you are being scammed or not.
· Demands huge upfront fees- a person or company posing as a counselor/counseling agency claims that they can negotiate with your lending service to modify/refinance your mortgage for a fee.
They won't offer any explanations about the process, just promises to handle all the details.
They may even feign urgency and scare you into paying immediately.
· Redirects mortgage payments - a phony counselor or lawyer advises you to pay your mortgage payments to him while he negotiates with the lending company.
After taking a few payments the scammer flees with your cash.
· Promises exact results - a person or company guarantees to get you a loan modification or stop a foreclosure.
They are just telling you what you need to hear.
No one can assure you anything without discussing with your lender.
· Avoids foreclosure by bankruptcy - instead of negotiating with your lending service, the scam artists pockets the fee you paid him and files for bankruptcy.
This will only stop foreclosure temporarily as the bankruptcy court processes the case.
Your lender will still be able to foreclose and worse, a bankruptcy stains your credit standing for a long time.
· Coerces you to sign documents - the con artist will pressure you to sign some paperwork that you haven't fully read or understood.
He may tell you that the document is for a new loan modification to make your mortgage current.
In truth, you may have just signed a document surrendering the title of your house.