CBS News recently aired a report that reviewed loan modification scams and the increase in activity by con-artists. Many homeowners have been hurt by changes in the economy with over 1 million homeowners experiencing foreclosure. The report mentioned that more than 10 million homes in the United States may be considered underwater properties; homes in which homeowners pay more than what they are worth. Loan modification may be a way to help but unfortunately troubled homeowners are becoming targets for scammers.
Although homeowners are encouraged to contact their lender if they are experiencing difficulty in making mortgage payments, many homeowners are finding it difficult to get the needed assistance from their lenders. Delays may include the lender passing off paperwork to another person or just dragging their feet on getting the process completed.
In this case, it makes homeowners more vulnerable to getting scammed since many don't want to continue dealing with their lender. According to CBS News, the HOPE Hotline has gotten more than 13,000 reports of loan modification scams from distressed homeowners in the last 2 years.
Red flags homeowners should avoid include promises or guarantee's made by someone who claims they provide loan modification services. There are non-profit services that provide assistance free of charge. Avoid those who want to charge outrageous upfront fees.
While lenders do have options to help homeowners keep their home, homeowners have several reliable sources with which to discuss their options. Questions or concerns can be discussed with your lender, a loan modification attorney or HUD-approved housing counselor.
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