Avoiding loan modification scams seems to be a full time job. Whether you are a troubled homeowner or a mortgage broker looking to partner with a legitimate provider, your challenge is to avoid the scams.
Here are a few common sense steps to avoid stepping into a loan modification nightmare.
1. Get Educated - Learn all you can about loan modifications. Read and study the news to learn what programs and processes are emerging. Get the facts on the ones that are available and who qualifies. The more you know about how these federal and bank programs work the easier it is to sniff out "too good to be true" programs.
2. Ask Questions - Most fraudsters are lazy. They won’t do the hard work to really research and learn how loan modifications work or programs that are available. Consequently, after a couple of questions a scam often begins to break down and reveal itself.
3. Do Your Research - Make sure that what you are being told is accurate. In the age of the Internet most facts are verifiable with a couple of Google searches. Make sure programs, processes, and offers jive with what is being reported by the government and major news outlets. Everyone is intensely focused on the continued mortgage crisis so there is lots of information. Take advantage of that.
4. Check with HUD - The US Department of Housing and Urban Development (HUD) is the go to resource for loan modifications and has great guidelines on loan modifications. As you work with a loan modification company it is smart to check loan modification facts and claims with the HUD website.
5. Check BBB & Ripoff Report - A couple of other great places to check out loan modification companies are the Better Business Bureau and Rip Off Report. Both are websites devoted to taking in consumer complaints. Both websites give businesses an opportunity to refute complaints–BBB is a little less transparent than Rip Off Report, but both give you tip-offs to a scam.
6. Don’t Accept High Pressure - Although troubled homeowners should have a sense of urgency in solving their challenges with house payments they shouldn’t submit to high pressure sales. Generally, the loan modification process is a very methodical legal-like contract negotiation. As such, it should be carefully considered and worked through. Pressure to accept or sign agreements should be met with skepticism.
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