As the housing market stumbled, many homeowners got in over their heads in mortgage payments. Missed payments and pressures from a tough job market forced many hardworking homeowners into foreclosure. As a result, there has been an increase in the number of foreclosure scams and fraudulent mortgage modification programs popping up around the country. For the unsuspecting homeowner looking for answers, these traps may not be seen until it is too late. However, there are a few ways to know how to spot the “bad guys” and protect yourself from becoming a victim of foreclosure or mortgage fraud.
Mortgage Modification Scams
Mortgage loan modification is a process in which the lender agrees to make changes to the mortgage loan in order to help out a financially burdened homeowner. Mortgage loan modifications include changes such as: reduction in interest rate, reduction in monthly mortgage payment, wavier of delinquency fees, extension of the life of the loan or reduction in the principal amount owed on the loan. A legitimate mortgage loan modification will be conducted between the homeowner and the lender directly. In many cases, the homeowner can directly negotiate changes with the lender without the need for any mediator or help of a company. The problem is that many fraudulent modification practices seem like the real deal.
Although there are many legitimate mortgage modification companies, be wary of any that charge large fees upfront or require you to sign a contract of their terms and conditions. Non-reputable mortgage modification companies may want you to sign over your deed or sign a negotiated deal without having you talk with the lender. Never sign anything unless you have spoken with the lender directly, have a copy of the negotiated deal provided by the lender and have read the fine print. Always remember that the arrangement is between you and the lender, the company assisting you should have no stake or claim in the negotiation.
Hire A Representative
A foreclosure attorney, or attorney that offers mortgage modification services, is usually your best bet when negotiating mortgage modifications with your lender. A foreclosure attorney can review your unique financial situation and discuss all of the options available to you. They can provide you with valuable resources to help you get relief in your mortgage payments, keep your house out of foreclosure and recognize a bad deal.