Report Unveils Tactics of Loan Scammers

One in nine home owners are more than 90 days behind on their mortgage payments, which has prompted loan modification scams that promise to rescue home owners from foreclosure doom to skyrocket.
Four fair housing organizations released findings this week uncovering some of the most popular loan modification scam tactics after a yearlong investigation of about 80 companies.

According to the report, some of the common scam tactics used were: 

1. 55% required an upfront fee to begin work or required a low initial fee to conduct minimal work — such as reviewing loan documents — on behalf of defaulting home owners.
2. 43% guaranteed or promised they would be able to secure a loan modification even prior to learning about the home owner's financial limitations.
3. 24% advised or encouraged home owners to stop making their mortgage payments or to stop contacting their lenders.
4. 16% guaranteed a loan with a lower interest rate, between 2 and 6 percent.
5. 12% discouraged home owners from getting free help from government-approved housing counseling agencies.

The report was issued by The National Fair Housing Alliance, The Connecticut Fair Housing Center, Housing Opportunities Made Equal of Virginia, and the Miami Valley Fair Housing Center.

 

Don't trust anyone, BUT YOURSELF. Banks have been doing loan modifications for decades, and there has never been a need for loan modification companies. Just pick up the phone and your banks will be eager to listen to your circumstances, and guide you through the process to see if you can qualify. If successful you will see your monethly payment reduced. The bank will be better off to have you keep on making the mortgage payment as opposed to going through the headache and costly foreclosure process.

 

The only people who won't qualify are those who:

• Are not honest and thruthfiul
• Don't have a legitimate financial hardship
• Are too messy with their finances, not just the mortgage, but also have liens on their house, owe taxes to the IRS, and are obviously not serious about their finances.

If you really want to get a loan modification and have a valid financial hardship. Most cases of financial hardship and distress are due to one of the causes listed below.  This is not a casual list - the items on this list are recognized by lenders as legitimate causes of financial hardship.  

• Loss of Job
• Mandatory Job Relocation
• Reduced Employment Income
• Reduced Self-Employment Income
• Military Service
• Business Failure
• Damage to Property
• Severe Illness/Incapacity
• Medical Bills
• Divorce or Separation
• Death of a Spouse
• Death of Family Members
• Inheritance Tax
• Payment Increase/Mortgage Adjustment
• Insurance or Tax Increase
• Too Much Debt
• Incarceration

If you want to use one of these causes to help make the case for either loan modification or a short sale, you need to be able to show to the lender's satisfaction both the cause and the degree of the hardship. Be serious and you will get what you want.