Homeowners who get behind on their payments will often be contacted by companies offering loan modification services because foreclosures are public record. Here are 5 tips to protect yourself from loan-modification scams.
Be particularly wary of businesses that ask for payment of services in advance. If someone asks you for big money in advance, it is probably a scam. Submit payment only for services rendered.
Beware of big promises. Some scammers promise high success rates and services as a mediator between you and your lender. They also might promise to cease foreclosure proceedings. These guarantees are warnings for potential fraud to come. If you’re promised an interest rate, or an exact principal reduction amount, it’s probably too good to be true. Know that no one can make promises without negotiating with your lender.
Deliver payment only to your mortgage lender. Chances are that if you send your house payment to anyone other than your lender, it will remain in their hands. Do not take a chance with your money.
We're from a government agency - NOT. Those fraudsters claiming to be part of the government are not. Contact a government agency via its official website or phone number. If you have questions whether a solicitor is legitimate, research them online, contact the Better Business Bureau, or use other reliable sources, such as the government pages in your phone directory.
Be careful with "second opinions." If a lender has declined your request for a loan, don’t pay for a second opinion.
Free advice. Certified agencies, like the Department of Housing and Urban Development (HUD), can provide free advice tailored to your needs. Contact them at 888-995-HOPE, which is a national 24-hour hotline or www.hud.gov.
