Want a Loan Modification? Don’t Pay for It
As one might expect in these economic times, as people become desperate for help, scams are popping up all over the place. There are foreclosure prevention scams, in which the unscrupulous take money from the unsuspecting and promise to help them halt foreclosure, and there are a number of other scams at work. With all the attention lately on loan modification, it is little surprise that scams related to this practice are also on the rise.
Paying fees for loan modification
There are “companies” that offer to help you negotiate a home loan modifcation with your mortgage lender. You pay high fees (sometimes close to $2,000), and the company claims that it will help you save money — and your home — through home loan modification. However, many of the companies do no such thing. They reel in desperate homeowners, collect the fees, and then disappear. Homeowners are left in the same place, but with even less money to work with as they try to save their homes.
If you are interested in getting a home loan modification, you should consider visiting the Web site of Consumer Credit Counseling Service. This organization helps people figure out if they qualify for federal programs, and then offer some help when it comes to home loan modification and refinance. You can also go straight to your mortgage lender. Government incentives aimed at encouraging mortgage lenders to help homeowners — not to mention the concerns over foreclosure — are making these lenders much more amenable to loan modification and refinance.
In the end, you should be wary of companies that promise to help you for an upfront fee. Mortgage lenders may charge loan origination fees and closing costs for a refinance or loan modification, but these are not usually required to be paid up front; many lenders will roll these costs into the new terms of the loan.
