With all the talk of mortgage crises filling the air waves, millions of homeowners who are in desperate need of relief are searching ways to modify their existing mortgage obligations. The most recent stimulus package passed by Congress and signed by President Obama recognizes the need for homeowner relief and has established various programs to aid those that need it most. Unfortunately, this nationwide predicament has provided a breeding ground for companies bilking distressed homeowners for thousands of dollars in fees for services that are often available for free. Worse yet, many scam artists simply disappear after collecting their upfront fees from homeowners desperate to prevent foreclosure.
In a recent Washington Post article, the paper noted that the mortgage meltdown has given birth to an explosion of companies charging thousands for loan modification services that non-profits offer for free. Federal law does not prohibit companies from charging for loan modification services. Instead, a myriad network of random state and local laws govern this insidious practice. Many states require companies offering loan modification services to have licenses. However, this does not mean that every business operating out there does, in fact, does have a license. If you are dealing with a company that you do not have an existing relationship with, you may want to ask them for their license number. Then, call and check them out with your State Banking Department to see if they are legitimate or have had any complaints filed against them.
To pay thousands of dollars up-front for services that are available for free is kicking the most needy homeowners while they are down. A less obvious cost of these scams is the time lost if the loan modification service never arrives. The lowest form of mortgage modification scam artist simply disappears after receiving his upfront fee. While the homeowner waits for promised assistance, delinquency notices keep coming. Worse yet, the value of the home continues to plummet while the homeowner waits.
These hucksters prevent distressed homeowners from seeking help where they actually might find it. Hope for homeowners seeking to prevent foreclosure most readily comes either through direct and early contact with the lender or through non-profit services that help homeowners negotiate with their lenders. The U.S. Department of Housing and Urban Development currently sponsors over 2,300 non-profit certified housing counseling agencies around the country. If you need more information on this subject, you can contact Roman Shaul at our firm (Roman.Shaul@BeasleyAllen.com or 800-898-2034) or you can go to this website: www.HUD.gov.
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