Due to the crash of the real estate market, there has been a rise in the number of scam artists that are looking to take advantage of uneducated home owners. A lot of these scam artists are the same ones that have put home owners into these predatory and toxic loans to begin with and are now using the demand for loan modifications by home owners as a new way to steal money from already cash strapped home owners.
What they do is buy a list of home owners that are late on their mortgage payments in their area or around the country. Where do they get this list from? Well, the good old credit bureau’s sells this information to lead companies which are the wholesale buyers and they in turn sell it to these loan modification companies.
They will then send a letter or post card to these home owners that have defaulted on their mortgage. In the letter or postcard they portray an image that they are sincerely here to help the home owner save their home from foreclosure and they understand that the home owner is going through a very stressful time in their life.
Once the home owner gets in contact with them, they let them know that they have direct contacts with all the major lenders and can stop the foreclosure, but in order for them to do so they will have to pay an upfront fee normally ranging from $1200 - $3000. Once the loan modification company collects the fees, they move on to the next unsuspecting victim as that is the last contact they will get from this company and in many cases the home owner loses there money and their home to foreclosure as they put their trust in these loan modification companies. These uneducated home owners were unaware that they had just been part of a scam.
The Federal Trade Commission and local State Attorneys have stepped up their efforts to combat these scam artists and have shut down many loan modification companies during their investigations. They are also sending a strong clear message that if loan modification company’s intent is to steal money from home owners in foreclosure, they will find them and prosecute them to the full extent of the law.
The harsh truth is that most of these victims will probably never see a dime of their money back as these scam artists are loose spenders and have spent most of the money they collected already. And the home owners have lost not just their money, but their home and dreams as well, how does one put a price tag on that?
While there are a lot of unscrupulous loan modification companies out there, there are some good ones that indeed do what they say and actually represent the home owners. Here are some things to watch out for to help determine if a loan modification company is a rip off or will actually rescue home owners.
Be careful of companies that promise specific results, so as an approval or specific rates and terms, as it’s your lender that hast he final say, not a loan modification company and this applies to attorneys as well. And do your research, there is so much information that you can find online nowadays to help you determine if a company is reputable.
