Don’t throw your money out the window. Beware loan modification scams!

Don’t throw your money out the window. Beware loan modification scams!

Don't throw your money out the window. Beware loan modification scams!

You are behind on your mortgage, collectors are calling at all hours, and you just got served with foreclosure paperwork by the sheriff. You don’t want to lose your home and you are feeling desperate. You are not sure what to do and that’s when you look online for solutions. There are many companies online making bold claims, guaranteeing that they can negotiate a loan modification with your mortgage company. They make it sound so easy, just submit some documents and a check for several thousand dollars, and they will work out an agreement with your mortgage company to save your home. Sounds like a good deal, right? Unfortunately, more often than not, it is too good to be true...and sadly many people don’t realize it until they have thrown thousands of dollars out the window and are still facing the loss of their home.

I can’t count the number of people that have come to me only days before the sheriff’s sale of their home, having paid thousands of dollars to an out of state company that made big promises and did nothing to help. They are frustrated at having wasted their hard-earned dollars, stressed at the prospect of losing their home, and at their wit’s end. Fortunately, most people make it into my office in time and I am able to help them file for bankruptcy protection to stop the sheriff’s sale and to give them an opportunity to save their home. If only they had looked into bankruptcy prior to placing trust in a loan modification scammer, I could have assisted them in stopping the sheriff’s sale and saved them hundreds, sometimes thousands, of dollars. Bankruptcy is most often a much more affordable alternative to saving your home and it costs nothing to come in a talk about bankruptcy options.

There are some legitimate loan modification programs out there, but in my experience, these programs are the exception rather than the rule. The loan modification scammers are easy to find, especially online. Here are some tips for spotting a loan modification scam:

  1. Is the company based out of state? In my experience most loan modification companies that prey on Louisiana homeowners are based out of state (many in California and Florida).
  2. Does this company want money up front? Federal Regulation O (12 C.F.R. 1015.5(a) (2012)) requires that loan modification companies successfully negotiate a written loan modification agreement with your mortgage company prior to receiving payment. If a loan modification company requests payment prior to successfully negotiating a written loan modification agreement, that company is violating Regulation O and is likely a scammer.
  3. Does this company guarantee that they will get you a loan modification? There is an old saying that “there are no guarantees in life.” If a company is guaranteeing you that they can work out a loan modification and stop your sheriff’s sale, it is likely to be a scam.

If you are behind on your mortgage or are facing foreclosure, you do have options. Many times bankruptcy is the most affordable and reliable way to deal with foreclosure. If you are considering paying money to a loan modification company, please call my office first. I offer free initial consultations and will be happy to discuss your options with you. Before you send your hard-earned money to an out of state company, call me, it costs nothing to come in and talk.

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Andress | Inzina
218 Rue Louis XIV, Suite A
Lafayette, LA 70508
Telephone: 337-347-9919
Fax: 337-541-2553
Andress | Inzina
343 N. Third Street, Suite 307
The Roumain Building

Baton Rouge, LA 70801
Telephone: 225-771-8220