As we have noted here in the past, there are a lot of shady companies popping up these days claiming to be offering loan modifications. The problem with some of these companies is that they collect a few thousand dollars up front and too often fail to deliver any loan modification at all. The Obama administration is working to clamp down on these scams. See an LA Times article on today’s announcement here.
The best way to avoid being scammed is to work with your mortgage company to get a modification yourself. There is no charge to work directly with your own company.
If that approach fails though there are legitimate loan modification companies out there though. We even recommend such companies to people when their own efforts come up short. The key is to be sure you work with a company that actually has a track record of successfully modifying loans, has real attorneys who have helped with modifications before, and most importantly has a written money back guarantee if they are unable to secure a loan modification.
May 21st, 2010 at 12:05 pm
I was contacted today by Integrity Mortgage & Credit Solutions, Inc. stating they were a non profit HUD certified, Neighborworks Certified, Nationally Certified Foreclosure Prevention and Default Counselors and charging $1,125.00 fee to process any mortgage modification application that could get us down to 2% fixed for the life of the mortgage. Every thing we see from official Presidential sources says companies charging any fees are not legal. What do you know about this?
May 22nd, 2010 at 2:37 pm
It is perfectly legal for a business to offer to help you with a loan modification for a fee. Just be aware that you don’t need to pay anyone to help you get a loan modification — you can seek one by contacting your lender directly.
Sometimes it makes sense to pay for professional help but it is always a “buyer beware” situation when you do so.