Five Loan Modification Scams You Should Look Out For

How can you pinpoint which loan modification organisations are actually scamming you? Unfortunately, tons of companies exist nowadays that are completely new in this industry and can easily scam people like me and you, while some simply do not have enough experience to know how much they are hurting instead of lending a helping hand. Here are signs, in which you can tell scams of loss mitigation:

1. Upfront fee charges are expensive.

Several loan modification organisations will charge up to ten thousand dollars just to get in contact with lenders for you to ask for loan modifications, and in several cases, when rejected, half of your money will be kept while the rest is returned. Sometimes you may not even get anything back as they claim they have done the best that they could. They will try and make you believe that the refusal was not their fault at all and they will try and make you believe that they are therefore entitled to the money that you have already paid upfront. This means that you could lose quite a bit of cash on something that you simply could have tried to do on your own. Companies should always offer some sort of money-back guarantee, as well as other alternatives that may reassure you that you will get your money’s worth.

2.Upfront fees are collected without explanation.

Anybody who is legit should care about and listen to what you are going through, as well as explain where your money is going and what you should expect while in the program. No question should go unanswered.

3. Lender proposals are accepted right away.

Sometimes, people pay the upfront fees for loan modification and in a few months, the bank returns with a completely unsuitable loan modification for your budget. Maybe even worse, no lender has been contacted yet. The big problem is that you can only make use of third parties once and if this happens. You will realize that the bank negotiations could have been done alone without paying fees and ending up with similar terms. If an attorney is working with you, you should come up with better solutions in your loan modification.

4. It seems far too good to actually be true.

If somebody promises you main reduction amounts or interest rates, it is likely that they are just telling you what you wish to hear. Take note that nobody can make promises in this business without having negotiated with a lender first.

5. There is no approval process.

Before agreeing to pay any upfront fees, you should go through a process of application that will determine whether you are qualified for assistance or not. Credit qualifying processes should not be included in this, as credit doesn’t happen to be a determining factor. What your application should come with is your overall budget, your hardships, your income, your property information. These things have to be reviewed and submitted before the company of loan modification can make a decision on your particular case. Approvals should never be determined by a phone call, let alone the first one.

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