This is the biggest dilemma a homeowner is faced with when looking for help to avoid foreclosure. Who to choose, where to start and who is legit? It's not a secret that nearly 75% of Loan modification companies are fraudulent or scam artists.
Loan modifications are in high demand right now. This makes it easy for scammers to pray on innocent people who usually will end up victims. Many lose their homes and the fee they invested for mitigation services. What's worse is, many homeowners entrust their last dime to an outside source who is supposed to help them.
This is why it is important homeowners take the necessary steps to ensure they have hired a trusted Attorney to deliver favorable results. This will also improve the state of our economy, because more people will be able to remain in their homes.
These said Loan modification companies often attempt to scam borrowers by accepting money or fees for loan modification services and then rejecting any type of loan modification that is plausible for the borrower, or imply minimal work on a file and do not implement negotiating tactics. Meaning they will get a package together for you, submit it to the lender, and accepts whatever the lender which will end up in less favorable results for the homeowner.
The best way to avoid Loan modification scams is to Retain an Attorney. Licensed Attorneys have a threatening presence in front of the lender and experienced in analysis and arbitration necessary to reach a fair agreement. You also are protected with the Attorney/Client Privilege which means everything is confidential.
Scroll down for tips on How to Avid Loan Modification scams, or keep reading if you would like help locating an affordable, established Attorney or Law Firm that can assist you in your area.
I have done extensive research, reviewed contracts, and asked imperative questions with many Attorneys. Based on my research, I have found a few affordable, honest Attorneys, and I am now directing distressed homeowners to them while participating during the process.
I have complied a handful of Attorneys and Law Firms who:
1. Are in good standing with the Bar Association
2. Are actual licensed attorneys who will be representing you and negotiating for you.
3. Have proof of success
4. Have passed my legitimacy test (scam free, and researched thoroughly through reliable resources.)
5. Have reasonable fees
6. Have the clients best interest in mind
7. Are structured and organized
8. Are in compliance with federal regulations and guidelines
9. Are helping homeowners in the State you reside in
10. Offer a Money Back Guarantee
******Tips on How to Avoid Loan Modification Scams. This is what I found during my research:******
Tell tale signs of a Loss Mitigation Scam:
- Charges a huge upfront fee :
Do not pay an upfront fee to anyone who is not a Licenced Attorney or Law Firm. There are some Loan Modification companies who will charge sometimes up to $7500 with out even reviewing your file upfront. This is an automatic Red Flag! These are what I refer to as Fee Chasers. In most cases you are promised the world "verbally" and a stage of urgency is set to scare you into paying them immediately.
Collects upfront fee with out explaining the process, or does not seem interested in your circumstances .
Anyone legit will listen and care about what your going through, and will explain exactly what you are paying for and what to look forward to while on the program. There should be no unanswered questions. Listen to your intuition! It is screaming at you!
- Does not stop the foreclosure legally
If your home is in foreclosure and you hire a company who is supposed to be negotiating on your behalf, what if the lender takes a long time to respond? Your may lose your home. There is no real sign to look out for on this one other than reading over your contract thoroughly to observe what services you will be paying for. Remember: Verbal promises are obsolete.
- Will accept the first proposal from the lender
You pay an upfront fee for a Loan Mod, and with in 90 days your bank comes back with a modification that does not suit you or your budget. or worse had not even been contacted. Now you find yourself 3 more months past due and probably a lot closer to foreclosure. A lot of times homeowners are forced into accepting terms that are not beneficial in order to keep their home, just to find themselves right back in the same situation a few months later. Problem is, you only are allowed one modification per year as it stands now. If you choose carefully and are working with an Attorney your loan mod should turn out significantly better, which obviously results in long term benefits.
These days the Internet has so much power you could literally have your business online without a physical location. Any Attorney you hire should have a verifiable physical address and stated as a Firm. Make sure to check the Bar Association too. They will know of any complaints that have been filed. Unlike the BBB, you can't pay the Bar Association for a good rating.
- Did someone promise you certain terms or rates for your loan modification?
This may be your biggest tip. Huge Red Flag! If you are being promised an interest rate, or an exact principle reduction amount, most likely you are just being told what you want to hear. Please note that no one can promise you anything without negotiating with your lender. This is extremely important. Legally you have no leg to stand on in court if anything was verbally promised to you because there is no way for you to prove it. Challenge them and ask them to provide what they are verbally telling you in writing. I can tell you this. It won't happen.
- Is there an approval process?
Before you agree to paying any fee at all, there should be an application process which would determine if you qualify for this assistance. This should not include credit qualifying. Credit is not a determining factor. The application should include, your budget, income, property info, and hardship, basically an entire package should be submitted and reviewed before the loan mod company or Attorney decides to take on your case. Your approval should not be determined on the first phone call.
- Can not find them on the BBB, or anywhere else for that matter.
Most companies who have been in business for at least a year will have a rating with the better business bureau whether they are a member or not. But the BBB is over -rated so take heed and don't stop there when doing your research. The best place to research an Attorney's background is with the Bar Association. You want to make sure you are working with a leader in the industry. Extensive research can help you establish this.
On the other hand, there are some legit companies who do what they say they will do. if you can affor to hire a Loan Modification Company, then you can afford an Attorney. But just be cautious while looking for help. This is a booming industry and there is a lot of greed. Doing this kind of research can be exhausting. You may still find that after researching them you are still unsure. It is very tedious work and does take time. Aside from researching them, you should know what questions to ask and read your agreement or contract carefully. I have provided some resources for you to begin your search. Better Business Bureau, Federal Trade Commission, Consumer protection agency, and rip off report.
If you would like help locating an Attorney who can assist you in your area, please contact me. I will be more than happy to help.
There is assistance available to everyone in any state.
This is what we do for our clients:
- I will analyze your situation and take an application to see if you qualify for free. You do not have to pay a Retainer Fee until your case has been reviewed and accepted.
- The Attorneys Legally place the foreclosure process on pause
Increased time to sell or rebuild your financial situation is an inherent benefit (Sometimes you are able to freeze your payments for up to 6 months depending on your hardship.)
- Help stop harassing phone calls (tell your lender to contact your Attorney who will speak on your behalf)
- Formulate a plan that fits with in the home owner's budget (reduced rate, 30-40 fixed term)
Work to have missed payments moved to end of the loan
- To work with your lender to provide you with the best modification that fits with in your budget
- Work to reduce or eliminate 2nd or 3 rd mortgage, or ask for a principle reduction if you owe more than your loan amount.
- To keep your family in your home and avoid displacement.
- To do everything possible to work out a solution. If your lender is unwilling to work with us, they need to provide a good explanation as to why. We will then talk to you about some other foreclosure prevention options that are available to you. Our mission is for you to keep your property, but this may not be beneficial to everyone.
- Provide you with a money back guarantee if for some reason they are unable to work out a solution that improves your current situation (which is about a 2% chance after having your case accepted), no questions asked!
The Fees are about the only thing competitive. You may think that having a team of Attorneys assisting you would be very expensive. This was one of the biggest challenge in my research. Finding not only legit help for my clients, but to make sure the fees are affordable. The fees happen to be very fair and competitive with even loan modification companies who don't even come close to providing you with an array of services. The best thing is, your going with a trusted Attorney who has credentials to back it up.
I pledge to be 100% honest, diligent, and treat you with integrity.
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