No one wants to talk about being in a difficult place
with their home mortgage or financial situation. Unfortunately, this can
often place homeowners in jeopardy of losing their home when they don't take
action soon enough.
Often the first line of defense is trying to
renegotiate the mortgage by using a loan modification company or "expert".
The Dirty secret is that homeowners are often left without the new loan they
were promised and without the cash they paid the loan modification company.
Caveat Emptor or "Let the buyer beware", read
on to see how to protect yourself from unscrupulous companies that might try
to take advantage of your situation.
"Pursuant to Senate Bill 94, as of October 11,
2009 it is illegal in California for any person, including
lawyers, real estate brokers, real estate salespersons, corporations,
companies, partnerships, or any other licensed or unlicensed person or
party, to demand, charge, or collect any advance, up-front, or retainer
fees, or any other type of pre-payment compensation, for loan
modification work or services, or any other form of mortgage loan
forbearance", according to the California Department of Real Estate.
So if someone tells you they can help you with loan
modification or renegotiation and/or deal with your lender to stop
collection of mortgage payments or stop the foreclosure process, and they
ask you for, charge or collect money or fees up front, that is a
violation of California law. You should report this immediately to the
California Attorney General, and to the California Department of Real
There are still plenty of scammers and con artists
out there preying on the desperate and misinformed consumer. "As
homeowners continue to feel the pinch from the recession, and as home loan
worries, delinquencies, defaults, and foreclosures continue to occur in
California, loan modification and foreclosure rescue scams are growing and
soaring. The FBI has said that a "rampant mortgage fraud climate"
currently exists, and that California is one of the top states for loan
how do you protect yourself from those that would take advantage of you?
Contact your mortgage company directly and request a Loan Modification that
works for you, and that the lender will accept.
Don't give up on the first try, be persistent and
take meticulous notes on who you spoke to, what was said, when you left
messages and any offers that were discussed. Try and get the contact
information of the person you spoke to.
The Department of Real Estate has some practical tips
for you for working directly with your lender on a loan modification. Those
consumer tips can be accessed at
If you are not comfortable negotiating with the
lender yourself, Work with a LEGITIMATE, LICENSED, and QUALIFIED person or
company. If you would like to read the entire report by the California DRE,
If you think you are in trouble, please, take action now.