How to Avoid Scams Using a Loan Modification Company?

If you have received a notice of default or notice of sale on your property and are trying to avoid foreclosure, or if you have lost equity, or if you just want to fix an adjustable loan, then you may want assistance from a loan modification company but how do you know which ones are reputable?

If you have come into financial hardship and have a hard time making your monthly mortgage payments, then a loan modification is your answer. Your loan is restructured in order to make the monthly payments more affordable. In order to do this either the interest rate is lowered or the balance of the loan is reduced or a combination of both. Often if you have any late fees those can either be waived or added on to your loan balance. The changes can help you avoic a foreclosure on your home.

It is difficult to find a loan modification company that can complete your loan modification who will not charge you until the process is complete. Many companies are scams as they will charge upfront fees and it is extremely difficult if not impossible to get your money back.

There are the warning signs to look for:

  • A company or person who wants an advance fee to work with your lender regarding your mortgage.
  • Anyone who guarantees a foreclosure on your home can be stopped.
  • Anyone who tells you to pay them instead of your mortgage company.
  • A company who offers a “government-approved” or “official government” loan modification.
  • Anyone you don’t know asks you for personal financial information either over the phone or online.

In all cases it is important to contact your mortgage lender prior to working with anyone offering reduce your loan. They will be able to tell you if you qualify for any type of government program.