Posted on Wednesday, April 22, 2009
Bad guys trying to wrangle $1000 to $3000 to help coordinate mortgage loan modifications from distressed homeowners are on the Feds radar screen.
With free government approved housing counselors available, one may wonder why anyone would pay for someone to help. Well, first alot of peole dont know about the free counseling (see links on foreclosurenationthebook.com, www.makinghomeaffordable, and 888 995 HOPE)). Second, some people want more attention and better service than they think free counselors can provide. In fact one of the reasons I think the refinance program may end up being more successful than the modification program is beacuse the refinance program allows mortgage brokers to be invovled - they generally get paid when they get you a refinance but not if they help you with a modification.
The FTC is sending warning letters to companies they become aware of and is filing cases as and when possible. The FBI is also investigating over 200 cases, a 400% increase from a few years back.
Be aware of any company that guarantees results or requires being paid in full up front. Remember the 3 golden rules our grandparents followed: eductae yourself before making any nmajor financial decision, be careful who you trust and even if you hire some one rememeber its up to you to follow up and keep on top of them - at the end of the day it is your home that is at risk and you are the only one responsible for your own financial well-being. Foreclosure Nation: Mortgage the American Dream (the book) includes detailed information about the red flags fo fraud and predatory lending and how to avoid them. Althought there are some good guys out there, many of the exact same bad guys who were selling us crappy fraudulent loans during the bubble are trying to sell us modifications now (they need to make aliving dont you know) so buyer be ware, you've been forewarned!
If you've been duped by one of these bad guys, call your State's Attorney General office- alot of state have toughened up their own laws against these bad guys.