Don’t Get Scammed on Loan Modifications

With the downturn in the housing market many companies are offering loan modifications. There are a lot of companies that are legit. However, there are also a lot of scams going on to take your money without delivering anything in return. Many companies want to receive a fee upfront before doing anything to help you get a loan modification.

Upfront fees are usually nonrefundable even if you are not satisfied with the results. It’s gotten so out of hand that the FTC (Federal Trade Commission) is considering a ban on these fees. There are scammers who are preying on people, such as yourself, who are in danger of losing their homes. These so called companies are asking for $2,000 to $3,000 in upfront fees from people who can’t even afford to make their loan payments.

The Attorney General’s office is handling tons of complaints involving debt negotiators. The scams involve people calling themselves “debt negotiators” who claim to help consumers with loan modifications. They charge a hefty upfront fee and are usually never heard from again.

If a company asks for an such fee, a red flag should go up in your mind. These fraudulent companies are popping up all over. The problem is so bad that upfront fees are banned in 20 states. One such state is California, who recently passed a bill banning upfront fees for loan modifications, which covers anyone asking for the fee, including lawyers. There had been a huge number of complaints to the state Department of Real Estate from consumers who had paid up to $3,000 dollars in upfront fees and got nothing in return.

If you contact a loan modification company and they ask for upfront fees, stop. They do not have your best interest in mind and only want to take your money. No matter how good the deal sounds you should not take the chance of loosing your hard earned money to a possible scam.