If you fall behind on your mortgage payments, I have a few tips to share with you that can help you avoid getting scammed.
Looking to sell a home in Southern California?
Looking to buy a home in Southern California?
Unfortunately, too many people fall for loan modification fraud and foreclosure rescue scams once they fall behind on their mortgage payments. However, there are several tips you can follow to make sure you’re not one of these people.
A loan modification is basically a restructuring of your loan where your lender agrees to modify the terms of your current loan agreement. When that happens, sometimes they’ll defer your payments, sometimes they’ll change your interest rate, and sometimes they’ll change the length of your loan.
If you start to fall behind on your payments and you need help getting caught up, my best advice is to call us so we can offer free guidance for what your next step should be to get on track. If it’s right for you to get a loan modification, we can provide information on how to process that correctly. If it’s right for you to sell your property, we can help you with that as well.
Also, beware of the mail you start receiving during this time, as some of that can be scam material. One of the most important things you must know is that no person or company—including attorneys, foreclosure consultants, or real estate agents—can demand advance payment for providing loan modification services. If someone asks you for money up front, do not pay them.
Don’t wait until the last minute to address this.
Now, here are 10 tips to follow to avoid being scammed:
- Don’t pay any upfront fees. I already mentioned this, but it’s worth repeating. Foreclosure consultants and other companies offering loan modifications are prohibited by law from collecting money before services are performed.
- Don’t ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.
- Don’t transfer title or sell your home to a foreclosure rescuer. This is a scam to convince homeowners that they can stay in the home as renters and buy the home back later. It also might be part of a fraudulent bankruptcy filing. Either way, the scammer can evict you and take the home.
- Don’t pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.
- Never sign any documents without reading them first. Many homeowners think they’re signing a document for a loan modification or for a new loan to pay off the mortgage they’re behind on and then later discover that they actually transferred ownership over to someone who is trying to evict them.
- Be suspicious of any guarantees made to stop the foreclosure process. No one can guarantee that they can stop the foreclosure process. No matter what your circumstances are, only your lender or servicer has the discretion to stop foreclosure and grant a loan modification. Also, no one can pre-approve your mortgage modification application—it has to come directly from the lender.
- Be suspicious of any letters or postcards that read “lender investigation notification” or claim that your bank or lender is currently under investigation for predatory scamming.
- Avoid dealing with any attorney-backed businesses or law offices that refuse to give a state bar number. If they’re not giving you a license number, they’re not licensed.
- Avoid companies offering forensic loan audits or predatory loan investigations.
- Verify the license of the person servicing your loan by contacting the Department of Business Oversight. You can do this by visiting their website at www.dbo.ca.gov or calling them at (866) 275-2677.
If you’d like to know more about avoiding loan modification fraud and foreclosure rescue scams or you have any other questions, don’t hesitate to reach out to me. I’d be happy to help you.
