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"The median monthly payment reduction for borrowers enrolled in
the (HAMP) program is $522" - DSnews.com
What Does a Loan Modification Scam Look Like?
In 2008 the U.S. economy hit its lowest point since the great depression and entered into what would become known today as the great recession. During this time many homeowners fell behind on their mortgage payments which meant very dangerous trouble for our country and its citizens. At the same time, a perfect storm occurred where thieves and scam artists, desperate themselves for money, found themselves an easy victim to prey upon: Homeowner is desperate need of saving their homes.
Because there were millions of people falling behind on their mortgage payment there was no shortage of people who were willing to pay a fee to try and save their homes. This is where the scam artists focused their efforts. They would get these customers on the phone, speak to them about the loan modification requirements, make them offers that should have sounded too good to be true, and then disappear with their money. So how do you spot these scams?
The first thing you need to look for when speaking to someone about help with your mortgage is credentials. See what their rating is with the BBB, how long they’ve been in business, testimonials, other ratings, credentials and licenses. After that, you want to review the contract closely. Are you protected? Can you cancel anytime? Are there any guarantees? You also want to be careful about upfront money. Do they want all the money before they start working? If they do, stay away.
Also, be careful for promises of forensics audits and reports and software offers. Sometime they tell you they will run your numbers through the HAMP software and tell you if you qualify so you don’t waste your time, many times for a nominal fee of $500. Other loan modification scams says they will generate an NPV report for you to show why the bank will modify, this also is typically a scam.
Basically what you need to look for is a reputable company, in business for some time, who can prove how good they are to you. Use common sense and a level of skepticism and you will do ok.
MAC