Loan Modification - Avoid The Scams
If you are behind in your mortgage payments, you will be contacted
by many people who will offer to provide a loan modification with your
lender.
What is a Loan Modification? That is where you and
your lender agree to modify one or more of the terms of your home loan.
The terms could be a lower interest rate, an extension of the length of
the loan (like making a 30 year loan into a 40 year loan), a conversion
of an adjustable rate loan (called an ARM) to a fixed rate, the
deferring of some of your payments, or any other modification of loan
terms.The goal of a Loan Modification is to help you keep
your home and to give you a real, meaningful, sustainable, and
long-term adjustment to your current home loan that works for your
financial situation.
To avoid the scams that take your hard earned money, remember these rules:
Rule
#1: Do not pay any upfront fees. After they have collected your money,
what is their motivation to getting a successful loan modification in a
timely manner. News story after news story have appeared in print, TV,
radio, the internet and other news media of people losing their money
to "loan modification" consultants.
Some state government websites, like California (www.dre.ca.gov)
have issued consumer scam alerts regarding loan modification and
foreclosure consultants. "California Civil Code Section 2945, which
regulates "foreclosure consultants", forbids anyone who falls under the
definition of a "foreclosure consultant", as well as a real estate
licensee, from collecting any advance fees for these types of services
if a Notice of Default has been recorded against your property"
Rule
#2: There are no "loan modification guarantees". Each bank or lending
institution has their own guidelines and policies. Successfully
negotiating a loan modification include: a) knowing what paperwork the
lender requires and how to prepare it, b)and presenting your case in
terms that follows the policies of your particular lender.
c)understanding your credit and how to improve it.
Also, each
borrower's financial circumstance is unique and each bank or lender has
its own loan modification policies and criteria, making it very
difficult for any company to guarantee a loan modification.
Even
then, there is a chance - not a guarantee - that your loan will be
modified. That's because the rules and policies are changing, as new
Federal regulations are introduced.
Rule #3: Never sign over
your title. Legitimate advisers would never ask you to sign over the
title to your home or ask you for power of attorney.
Rule #4: Remember Rule #1 - Don't ever pay any upfront fees.
On
the other hand, there are some legit companies who do what they say
they will do. But just be cautious while looking for help. This is a
booming industry and there is a lot of greed. There are companies that
offer a "no upfront fee loan modification program, where you pay only
if they get results that you agree with. There are also State and
Federal agencies that can provide assistance.
About the Author:
Do you qualify for a loan modification? Find out how on this website that offers a "No upfront fee loan modification program": http://www.noadvancefeeloanmodification.com
