Scumbags! Sorry, I mean loan modification companies
I find myself writing a lot about this subject because it pisses me off and totally ruins my day. It seems like everyday I hear of another scumbag taking advantage of someone trying to modify their home loan.
Loan modification scams happen left and right everywhere, even at the local level right here in San Diego. If you are looking for someone who can help with a loan modification, don’t take for granted the fact that there are a lot of people who take advantage of your need for their own benefit. It is therefore a necessity to know what the signs of loan modification scams are so you can guard yourself against them. 
Homeowners trying to get their mortgage payment lowered or fixed are usually having a difficult time meeting their monthly payments. They often find it a problem to ask for help and advice from other people. This makes them extremely vulnerable to these loan modification scumbags. These scumbags can approach you easily through misleading marketing efforts and many other means. After all, lenders publish notices at the 90 day delinquency period which is public information. This gives the scumbags their very own hit list. So what should you watch out for to determine if you are being scammed?
Requests for instant fees. The objective of scammers is to get your money. It is only natural that the first thing they ask for is payment for services they have promised but have yet to deliver. There are small fees that are normally required in housing counselling, but if your foreclosure consultant starts asking for payments by the thousands, this is one sign for you especially if no work has been done yet.
Promises and guarantees. A loan modification is a tricky task and legitimate foreclosure counsellors know this. So they often refrain from giving guarantees. Solid guarantees and the strongest of promises often say exactly the opposite. So when you start hearing unrealistic promises, start looking for another consultant.
Cutting off communication. Foreclosure scumbags may tell you to stop communicating with your lender. However, regardless of whether you are working with a foreclosure consultant, you should still communicate with your lender. In fact, your lender should be your first source of help when you are looking for a revised payment plan.
Requests for title transfers. This is the WORST! Some scumbags ask you to transfer the title of your home to them. In exchange, they will make your mortgage payment. Then they will allow you to stay in your home as renters. However, this means they have the power to increase your rental fee, sell the house to someone else and keep the payments, or even evict you. The majority of scumbags transfer title of the property to some LLC or other bogus entity, offer you a rent to own option, collect your rent and never make a payment. By the time you find out what is going on because they tell you not to talk to the bank, they have collected thousands of dollars, possibly 12-18 months worth of rent and never make 1 payment!
Incomplete contracts. Contracts that are not complete, filled out properly, or not clear are scumbag warning signs, too. Never sign contracts that you have not read or don’t understand. Also, beware when your consultant somewhat pressures you into signing a contract. Do not hesitate to ask questions. Loan modification scams are happening in San Diego by the minute and many other parts of the country. Legitimate foreclosure consultants would be willing to answer all your questions.
If you have any questions or concerns, you can always ask for help. Below is a link to a list of HUD approved housing and counseling agencies. If your in San Diego, you will be able to find several options for local agencies that may be able to provide some assistance. If you are ever in doubt, ask for help, get 2-3 opinions!
Imprtant Links
- HUD Approved Housing Counseling Agencies
- California Department of Real Estate “NO OBJECTION” Approved Loan Modification Brokers – use caution, even though these companies are approved, they still could be scumbags!
- Our main article on mortgage scams
August 14th, 2009 at 2:42 pm
Totally agree with this post, I can’t tell you how many friends I have that are going through hell trying to modify their loan. On top of that, there are so many people being taken advantage of by bad companies.
August 14th, 2009 at 5:08 pm
I agree as well. I just wish more people knew about the fact that it’s illegal to charge for loan modification services, so if someone is asking for money up front it’s clear right away that it’s a scam. But the more people are talking about it online and in public, the more people will know to steer clear, hopefully.
August 16th, 2009 at 8:06 am
Sometimes, they just take advantage when they know that their client doesn’t know anything about it. Shame on these people!
August 17th, 2009 at 11:04 pm
Yes, I agree with you about this loan modification, to begin with you are asking for it because you want to lower your mortgage and yet they charge you to modify your loan, what is that, you need to lower down what you are paying and yet they will ask money before the do it, i don’t think that they understand that you need help and I believe that it is illegal to ask for loan modification fee. If they can show a proof that they should charge this then there is nothing we can do.
August 18th, 2009 at 11:06 am
Loan modification companies totally take advantage of homeowners in distress. These poor people are afraid and can’t get their lender to negotiate or respond at all sometimes. I know, it happened to me and finally I just gave up and foreclosed. I don’t understand why banks make it so hard to modify that they can’t work with thiuer clients on their own. I manage an office with a HUD approved counseling agency in it and let me tell you they are wonderful. They explain all the homeowner’s options and help them navigate through the paperwork required by the banks and somehow get answers. ALL FOR FREE!!! Totally worth the wait for an appointment. Brewer Caldwell
August 18th, 2009 at 12:17 pm
Here! Here! They are just extending the mortgage crisis we are in. They aren’t making it any better.
August 18th, 2009 at 5:23 pm
Hi,
Loan modification companies totally take advantage of homeowners in distress.
Sometimes, they just take advantage when they know that their client doesn’t know anything about it.
August 21st, 2009 at 10:37 am
Scammers are everywhere and always will be. It is amazing and shameful how many dishonest and unethical people there are out and about.
August 21st, 2009 at 11:53 pm
Hi,
I am not sure if I should buy a Condo or Home in Iowa city.
Looking for help.
Thank you.
September 4th, 2009 at 4:27 pm
Hi Maxine,
I am a Realtor from Iowa City. I have information that you should read about the Pros & Cons of buying a Condo vs. Home.
Please let me know if this helps.
Cheers,
Michael Mceleney
September 13th, 2009 at 2:25 am
I guess I am pretty fortunate in my market area to not see a whole lot of this happening. I did just elude to on my last comment about a Owner/Seller actually pulling one over their lender. Made me just as sick, although it was only hear-say. But this person got the 1st mortgage interest rate lowered, the 2nd ($30K) totally totally forgiven, and then turned around and sold the house for a $40K profit, minus closing cost and commissions.
This person did negotiate directly with the lenders and did not use a 3rd party to negotiate, so I commend them on that, but at the same time her hardship was not too extreme she got divorced but was the main bread winner anyway. Still hate seeing anyone take advantage of any system.
Jay Myers´s last blog ..How some agents waste your time and theirs with Open Houses
September 17th, 2009 at 9:46 pm
Yes, that’s right. Loan modification scams are everywhere and only few people are aware of it. These scammers can really cause their victims so much bad experience and losses. Scammers of loan modification doesn’t only cause damage to their victims but the state and the whole loan modification industry as well. People who hear about the ongoing scams are now afraid to transact even with those who are not involved in scams. The solution here is to make sure that you can trust the person you are talking to and try to investigate, anyways, there are so many online resources where you can have quick checks on someone’s background. As much as possible, never trust third parties when dealing with money and always check if the company is legit and if the agent is really working in that company.
October 28th, 2009 at 11:53 am
this kind of thing is happening in the UK and is certainly something people need to look out for, if some thing sounds too good to be true….
November 8th, 2009 at 9:48 pm
Some people will try to scam anyone. They move from scam to scam. It is hard to know where to go in that situation though. A lot of people want to believe
November 9th, 2009 at 2:06 pm
The best thing we can do is bring more attention to the subject and encourage people to take action if they feel like they have been taken advantage of.