Be carefull of Loan Modification companies that charge upfront
I talk to people almost daily all across the Sacramento area who have paid for a Loan Modification with absolutely nothing to show for the money they spent.
It seems that everywhere in California; especially where foreclosure filings are rampant like the Central Valley, Sacramento, Stockton, Modesto areas especially, Loan Modification scams are popping up everywhere.
A Sacbee Story
It goes something like this: A homeowner falls behind on his mortgage and soon thereafter receives a letter from a company promising to help him get a modification of his mortgage. Over time, the homeowner ends up paying hefty fees of $3,000 to the company, and waits, having been instructed not to contact his lender and thinking his mortgage problems are being resolved.
The “loss mitigation” company, it turns out, was never there to help. Instead, it is the same company that previously peddled subprime loans and simply found a new way to prey on people in need.
This scenario is all too common. Countless homeowners have been defrauded by this type of scheme since the start of the foreclosure crisis. Mortgage counselors at 40 agencies in California,
representing thousands of distressed homeowners across the state, report fee-for-service scams are a rising problem among their clients, according to a recent survey by the California Reinvestment Coalition.
President Barack Obama
‘s foreclosure prevention plan is striving to bring help to millions of distressed homeowners and moving their mortgages through the loan modification process. Instead of joining the president’s goal of helping communities, these companies are engaged in a manipulative marketing ploy, dangling the prospect of relief in front of desperate borrowers.
The average fee these companies charge borrowers is $3,000 and some go as high as $9,500. All or most of these fees are charged up front, before any services have been rendered. And some companies even have the audacity to charge monthly fees.