What is a Loan Modification? It’s when a borrower who is facing great financial hardship, having difficulty making their mortgage payments and is facing foreclosure, works with their lender to change the terms of their mortgage loan to make it affordable.
But now there are many companies scamming the borrowers (you). Below are a few things to look out for to protect yourself from Loan Modification Scammers:
- A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.
- A company/person guarantees they can stop a foreclosure or get your loan modified. Nobody can make this guarantee to stop foreclosure or modify your loan. Legitimate, trustworthy HUD-approved counseling agencies will only promise they will try their very best to help you.
- A company/person advises you to stop paying your mortgage company and pay them instead. NEVER send a mortgage payment to anyone other than your mortgage lender. If you find you are having trouble making your monthly payment, contact your mortgage lender.
- A company pressures you to sign over the deed to your home or sign any paperwork that you haven’t had a chance to read, and you don’t fully understand. A legitimate housing counselor would never pressure you to sign a document before you had a chance to read and understand it.
- A company claims to offer “government-approved” or “official government” loan modifications. Contact your mortgage lender first. your lender can tell you whether you qualify for any government programs to prevent foreclosure. Remember, you do not have to pay to benefit from government-backed loan modification programs.
- A company/person you don’t know asks you to release personal financial information online or over the phone. You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.
Information taken from Neighbor Works America