The Truth About Loan Modification - Separating Fact From Fiction and Exposing Sale Tactics
The loan modification industry has being getting a bad rap due to the many loan mod scams out there.
We must remember whether its the loan modification industry, credit repair, debt consultation, mortgage and/or banking industry there is always people and companies out there trying to take advantage of people and breaking the law.
Lets face it a lot of the blame for the foreclosure crises can be blamed on predatory lending, and many loan modification companies are trying to solve the problem by restructuring many of these homeowners loans to more favorable terms.
The problem is many unscrupulous companies scammed people out of thousands of dollars and did nothing and ran away with peoples money and leaving people with the same loan agreement.
Now many states have passed laws making it illegal for loan modification companies to charge up front to do loan mods for people.
To protect the homeowner these laws have been passed, and the FTC announced five law enforcement actions against operations using deceptive tactics to market their mortgage modification and home foreclosure relief services, including firms that marketed their "services" by giving the false impression they were affiliated with the federal government.
These companies have made it very hard for consumers when looking for help in a desperate situation.
I feel a duty and responsibility to provide and separate truth from myth and expose sale tactics used by many loan mod companies.
Fiction#1 Its illegal for loan modification companies to collect money up front to do loan mods.
Fact: There are only 6 states that currently have laws in the books that state you can't collect money up front to do loan mods Illinois, Florida, California, Georgia, Washington State, and pretty soon Nevada.
The other 44 states it is legal for a loan modification company to charge up front.
Fiction#2 Anybody can qualify for a loan modification Fact: Qualifying and getting a loan mod accepted depends on each person unique circumstance.
So if a loan mod company tells you they can guarantee you a loan mod their lying and just trying to get money out of you.
Fiction#3 Only Attorneys can do loan mods Fact: Loan modification does not require an attorney You can actually do your own loan modification, and in some circumstances an attorney might be required.
If so their are services that can help you find a reputable and qualified attorney in your area.
If using a company that is attorney backed you should be able to get that attorney's info to verify their credentials on their respective State Bar Association website.
Things to look out for to know if your dealing with legit company.
They will provide a free evaluation to make sure you even qualify for a loan mod, no legit company will ask for any money until they prequalify you and get your approval to start the loan mod process, and if they fail will refund you 100% of your money if paid upfront.
A legit company will also follow all state laws, and not charge up front in states where it is illegal and even in states where it's not illegal will still provide the option to not charge you until successful completion of a loan mod, and have attorney's on staff.
Another big tip is check with the BBB make sure any company you deal with that you're going to give your hard earn money to has no history of complaints.
We must remember whether its the loan modification industry, credit repair, debt consultation, mortgage and/or banking industry there is always people and companies out there trying to take advantage of people and breaking the law.
Lets face it a lot of the blame for the foreclosure crises can be blamed on predatory lending, and many loan modification companies are trying to solve the problem by restructuring many of these homeowners loans to more favorable terms.
The problem is many unscrupulous companies scammed people out of thousands of dollars and did nothing and ran away with peoples money and leaving people with the same loan agreement.
Now many states have passed laws making it illegal for loan modification companies to charge up front to do loan mods for people.
To protect the homeowner these laws have been passed, and the FTC announced five law enforcement actions against operations using deceptive tactics to market their mortgage modification and home foreclosure relief services, including firms that marketed their "services" by giving the false impression they were affiliated with the federal government.
These companies have made it very hard for consumers when looking for help in a desperate situation.
I feel a duty and responsibility to provide and separate truth from myth and expose sale tactics used by many loan mod companies.
Fiction#1 Its illegal for loan modification companies to collect money up front to do loan mods.
Fact: There are only 6 states that currently have laws in the books that state you can't collect money up front to do loan mods Illinois, Florida, California, Georgia, Washington State, and pretty soon Nevada.
The other 44 states it is legal for a loan modification company to charge up front.
Fiction#2 Anybody can qualify for a loan modification Fact: Qualifying and getting a loan mod accepted depends on each person unique circumstance.
- Banks views your hardship, the event that has made your monthly mortgage payments unaffordable.
- Your financial ability to even afford a lower payment
- Your commitment to a long term solution
- Your debt to income ratio
- Supporting docs like W2s and bank statements
So if a loan mod company tells you they can guarantee you a loan mod their lying and just trying to get money out of you.
Fiction#3 Only Attorneys can do loan mods Fact: Loan modification does not require an attorney You can actually do your own loan modification, and in some circumstances an attorney might be required.
If so their are services that can help you find a reputable and qualified attorney in your area.
If using a company that is attorney backed you should be able to get that attorney's info to verify their credentials on their respective State Bar Association website.
Things to look out for to know if your dealing with legit company.
They will provide a free evaluation to make sure you even qualify for a loan mod, no legit company will ask for any money until they prequalify you and get your approval to start the loan mod process, and if they fail will refund you 100% of your money if paid upfront.
A legit company will also follow all state laws, and not charge up front in states where it is illegal and even in states where it's not illegal will still provide the option to not charge you until successful completion of a loan mod, and have attorney's on staff.
Another big tip is check with the BBB make sure any company you deal with that you're going to give your hard earn money to has no history of complaints.
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