| Although the housing market is in dire straights | | | | 3. Check Credentials |
| with pending foreclosures, this is one time where | | | | Before entering into contract with a loan |
| you will need your wits about you to make a | | | | modification firm, be sure to check for a business |
| clear and sound decision for foreclosure | | | | license and any track record of complaints. The |
| prevention solutions. The marketplace is flooded | | | | Better Business Bureau offers online services to |
| with scam artists waiting to capture desperate | | | | gather information on a company and such free |
| prey that will sign on the dotted line for an urgent | | | | services can save you time, energy and money in |
| loan modification. Be sure you explore all your | | | | the long run. If you are in doubt over a loan |
| possibilities at the first sign of financial distress, | | | | modification firm, see your local real estate or |
| and follow a few tips to avoid the loan | | | | loan broker for some options. The loan |
| modification scams. | | | | professionals are licensed by the state and |
| 1. No Telephone Prospecting | | | | subject to disciplinary action should they be |
| According to FBI statistics, the modification | | | | negligent in their duties. However, many of the |
| companies that approach the client with a | | | | loan modification companies that are not tied to a |
| telemarketing call have the highest incident for | | | | real estate office have sprung up from nowhere |
| scamming and identity theft. Never give your | | | | and have no proven track record of their |
| personal information to someone over the phone, | | | | performance. In some cases, an attorney may be |
| unless you initiated the call and know who you are | | | | your best option if you believe you will benefit |
| talking to. In some cases, the caller may be from | | | | from a bankruptcy, rather than a restructuring on |
| a legitimate office, and you may check that by | | | | your existing loan. |
| getting their name, address, and phone number. If | | | | 4. No Guarantees |
| the office is local to your area, you may wish to | | | | Although there are many qualified loan |
| pay them a visit, rather than doing business over | | | | modification providers, its important to steer clear |
| the phone. | | | | of the companies that make false claims and |
| 2. Read The Fine Print | | | | promises. A cunning loan representative will tell the |
| Before signing any document, be sure to ask | | | | anxious clients exactly what they want to hear, |
| many questions until you are fully satisfied with | | | | irrespective of facts and circumstances. A loan |
| the answers. Unscrupulous loan modification | | | | modification firm may assert that they will make |
| providers often slip a notation at the bottom of | | | | every effort to contact a lender to reduce your |
| the contract that requires a hefty non-refundable | | | | mortgage payments, however, they cannot make |
| deposit or retention of the up-front payment. | | | | a guarantee of the outcome of their services. If |
| Some states, such as California, does not permit | | | | the loan modification rep tries to guarantee that |
| the loan modification company to cash the client's | | | | your new payments will be in the price range you |
| check until the services are completed with | | | | have in mind, walk away. Mitigating factors such |
| success. The Department of Real Estate | | | | as credit, new income level and more are applied |
| mandates that each firm hold the client funds in a | | | | to each individual case, and not every loan |
| trust account until the loan modification is | | | | modification applicant may be approved. Your |
| complete. In such cases whereas the loan mod | | | | income level must be verifiable that you can |
| could not be performed, the DRE ensures the | | | | handle the new payments, and in such cases as a |
| client will get a 100% refund. Check with your | | | | job loss or income reduction, a new bank may |
| state board of real estate for laws and | | | | decline the loan. |
| restrictions to protect the consumer, and only do | | | | 5. HUD. |
| business with loan modifications firms that comply. | | | | |