Loan Modification Companies: A New Business Plan For Scam Artist

Due to the crash of the real estate market, there has been a rise in the number of

scam artists that are looking to take advantage of uneducated home owners. A

lot of these scam artists are the same ones that have put home owners into

these predatory and toxic loans to begin with and are now using the demand for

loan modifications by home owners as a new way to steal money from already

cash strapped home owners.

What they do is buy a list of home owners that are late on their mortgage

payments in their area or around the country. Where do they get this list from?

Well, the good old credit bureau’s sells this information to lead companies which

are the wholesale buyers and they in turn sell it to these loan modification

companies.

They will then send a letter or post card to these home owners that have

defaulted on their mortgage. In the letter or postcard they portray an image that

they are sincerely here to help the home owner save their home from foreclosure

and they understand that the home owner is going through a very stressful time

in their life.

Once the home owner gets in contact with them, they let them know that they

have direct contacts with all the major lenders and can stop the foreclosure, but

in order for them to do so they will have to pay an upfront fee normally ranging

from $1200 - $3000. Once the loan modification company collects the fees, they

move on to the next unsuspecting victim as that is the last contact they will get

from this company and in many cases the home owner loses there money and

their home to foreclosure as they put their trust in these loan modification

companies. These uneducated home owners were unaware that they had just

been part of a scam.

The Federal Trade Commission and local State Attorneys have stepped up their

efforts to combat these scam artists and have shut down many loan modification

companies during their investigations. They are also sending a strong clear

message that if loan modification company’s intent is to steal money from home

owners in foreclosure, they will find them and prosecute them to the full extent of

the law.

The harsh truth is that most of these victims will probably never see a dime of

their money back as these scam artists are loose spenders and have spent most

of the money they collected already. And the home owners have lost not just

their money, but their home and dreams as well, how does one put a price tag on

that?

While there are a lot of unscrupulous loan modification companies out there,

there are some good ones that indeed do what they say and actually represent

the home owners. Here are some things to watch out for to help determine if a

loan modification company is a rip off or will actually rescue home owners.

Be careful of companies that promise specific results, so as an approval or

specific rates and terms, as it’s your lender that hast he final say, not a loan

modification company and this applies to attorneys as well. And do your

research, there is so much information that you can find online nowadays to help

you determine if a company is reputable.