Beware Loan Modification Scams

More home owners in Los Angeles who are desperate to avoid foreclosure are finding themselves victims to loan-modification scams that are all over.

In the latest to headlines, attorneys in California, where these scams are particularly rampant, filed the state’s first class-action lawsuit against an alleged loan modification scam, part of http://www.rewiremyloan.com/. In the lawsuit, prosecutors charge that the company collected nearly $5,000 each from at least 90 victims, promising to do loan modifications and offering a 100 percent money-back guarantee. The victims say the company never did the loan modification or refunded their payments.

The majority of the victims in the lawsuit are Spanish-speaking, and while the advertising and discussions they had with the company were in Spanish, they say the contracts they signed were in English. The home owners say they were also told to not contact their bank directly or their contracts would be voided. (Read: How to Spot Foreclosure-Prevention Scams)

Scam Prevention Network
The Lawyers' Committee for Civil Rights, government housing agencies, and other nonprofits have created the Loan Modification Scam Prevention Network to compile complaints about such fraud. From February 2010 to June 1, the network gathered nearly 15,000 complaints involving $37 million in lost money. California accounted for the majority of the losses, with 3,105 complaints filed and $11 million in losses from these scams.

For home owners who believe they were a victim of a loan-modification scam, the Loan Modification Scam Prevention Network encourages them to visit www.preventloanscams.org to file a complaint. I have always understood that people need to be surrounded by a team of financial expert, that can guide them so they can potentially reduce dramatically the risk of financial setback, but if for any reason financial setback occur due to unforseen circumstances, they can at least get reliable advice for experts.

Andre Plessis, REALTOR & Financial Educator.

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