Loan modification scams are popping up all over the place, and any homeowner considering using a loan modification company to help with their modification needs to be aware that not all of the companies out there are legitimate.
There are so many loan modification scams out there that the FBI has started taking steps to shut down these scammers before they rip off anyone else.
If the concept of a loan modification scam seems a little odd to you, you wouldn't be surprised if you knew that most homeowners feel the same way. But not knowing about them or taking a "It's not going to happen to me" attitude is what has cost thousands of people across the country their hard-earned money already.
First the question: what are loan modification scams? Essentially it's when a modification company offers their services to help get your application approved, but fur an up-front fee.
After the fee they promise to work on your case, and in most cases they disappear after that. But sometimes they don't disappear, a portion of them give you follow up calls to tell you the "status" of your application, or to request more money to move the application along.
There are never good results and there is little you can do to protect yourself besides not dealing with them at all.
The biggest tell-tale sign is the upfront fee, as legitimate companies that assist with loan modifications usually don't ask for a fee until after the consultation. But another sign is if they contact you first, as opposed to you seeking them out. Anything in the mail, solicitation, or even phone calls from companies you've never dealt with before are bad news.
If you're considering using a loan modification company to help you with your application, check with the Better Business Bureau before getting in contact with them. You can also search online to find the experiences of other homeowners who have dealt with that company or others to find a company that will not leave you high and dry.
If everything seems fine except for the fact that they are asking for an upfront fee, they are not a company you want to work with.
It's understandable if you want help with your modification application, as lenders are extremely difficult to negotiate with, but be aware of the risk of loan modification scams out there looking to find you.
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