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Home Loan Modification Scams

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By Kay J. Sharp – Special to Dallas South News

It’s a sad truth that there are many predators out there selling false loan modifications to take advantage of homeowners who are in trouble. However, you can keep yourself from falling into this trap if you know the signs of a home loan modification scam.
First, you should be wary of any company that tries to charge you a fee for loan modifications. HUD approved loan modification counselors are free. It is actually illegal for a loan modification company to try to charge you that fee, so right away you should know that something is wrong. You need to hold on to that money anyway: you might need it to fix your loan.
Second, you should avoid any company that tries to pressure you into signing paperwork as soon as you meet up with the counselor. Any legitimate company will encourage you to read over the paperwork and ask questions if you have them, and will often explain what the paperwork means. They will not use high pressure tactics to urge you to sign.
Third, you should never, ever sign your deed over to any third party. Some home loan modification scams don’t even involve modifying the loan. Sometimes, the shyster will come in and offer to buy your house out from under you, and then let you rent it back from him. He poses as a slick investor and seems very legitimate. So you sign the deed away. But the mortgage is still your responsibility! The shyster walks off with your rent payments at the least, and the house is either lost anyway or legally his while you still have to pay the mortgage at worst.
Fourth, you should never pay your mortgage to anyone other than the bank. If your bank instructs you to pay someone else, like an escrow company, that is fine, but if you do not have it directly from the bank you should not do it. Often that money is simply going into the con man’s account, and they’ll be walking away from you soon enough, disappearing and leaving you worse off than you were before.
Be aware that these scam artists are very good at making themselves look legitimate. They will often have short term, professional looking company websites, business cards, phone numbers, and paperwork that makes them appear to be the real thing. They also sometimes employ a large staff of telemarketers to get your attention. Be careful!

Kay J. Sharp is a Loan Modification Specialist who wants to help people understand the Home Loan Modification process and assist them to save their home from foreclosure. He regularly writes about Loan Modification Program related issues.  To know more about the author please visit: www.cdloanmod.com

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