If you have trouble paying your mortgage, you may be considering loan modification. The United States Department of Housing and Urban Development has a section for frequently asked questions, and the California Department of Real Estate has a section to help you in your due diligence.
If you think you are ready for loan modification, you’ll have to start looking for companies that will help you, but you have to be careful because there are companies out there that will take your money and do nothing else but to hold off foreclosure. The New York Times recently wrote about this trend and advice on how to proceed:
Peggy L. Twohig, associate director of the financial practices division at the Federal Trade Commission, said consumers should be wary of companies that promise results, charge upfront fees or tell them not to contact their lender on their own. Ms. Twohig said consumers could get the same help free from nonprofit housing counselors.
“Our advice to consumers is to contact their loan servicers directly or to call Hope Now or HUD-approved housing counselors,” she said.
Beware of Companies That Take an Advance Fee.
If the loan modification company is in California and they require you to pay upfront, then check if they are on the CA DRE’s list of brokers who have submitted their Advance Fee Agreement to the DRE and have received a “No Objection” letter. This means the contract that you sign which described their services to you has been submitted to the DRE for review and has not raised any “red flags”, in which they can take an advance fee (e.g. payment upfront). Even if the company is DRE-approved to do loan modifications, make sure you do your due diligence and seek recommendations from others who may have experience.
Of course, loan-modification companies are not the only game in town: you can also seek the assistance of an attorney to help you with loan modification. Good luck to you!
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Information on this site is for informational and educational purposes only; it does not constitute legal advice nor does it create an attorney-client relationship. Should you need assistance, please contact an attorney to help you with your specific set of facts.
Related posts:
- Loan Modification Tips: Avoid Becoming a Victim
- More Loan Modification Madness: 133 Loan Mod Companies Targeted by CA Attorney General
- LA Times: A Quick Guide to Loan Modification
- Are You a Broker Looking to Take an Advance Fee for Loan Modifications?
- Second Lien Program: Extinguishing a Second Mortgage
