It is upsetting to hear the news reports that there are individuals and groups out there working scams to extract money from homeowners who are trying to do the right thing…..and who can least afford it. Homeowners in financial distress are being targeted by scam artists purporting to assist homeowners with loan modifications, short sales and foreclosure “rescue”. If you or someone you know is having problems making their mortgage payments, please pass on this information
Here’s what you need to know:
You can negotiate a loan modification directly with your lender. Your lender should be able to provide you with a list of the items needed to get you started. Loan modifications are for those in financial stress, therefore, you will be asked to provide a hardship letter, current income, expenses, and banking information.
You can also hire a licensed real estate broker or agent who has experience with loan modifications and short sales or you can hire an attorney who does this kind of work in the regular scope of their business. Both will have access to the forms necessary for completing the loan modification, or short sale.
Red flags are almost to numerous to mention, but here are some to watch out for:
requesting money up front before providing any service
instructs you not to contact your lender, lawyer, housing counselor, family, or others
asks for mortgage payments to be made directly to his or her mortgage company rather than your lender
requires payment by cash, cashier's check, or wire transfer
pressures you to sign paperwork that you may not have had a chance to read, or fully understand
asks you to sign a power of attorney, suggesting that your credit can be repaired
promises to stop the foreclosure process, no matter the circumstances…guarantees success
encourages you to lease your house and buy it back over time
offers to buy your house for a fixed price that is not set by the housing market at the time of sale
asks for signatures on a grant deed or deed of trust
asks you to transfer deed or title to them
offers to fill out the paperwork for you
asks for signatures on documents that have left lines blank
fails to provde copies of signed documents
refuses or fails to put oral promises in writing
...the list goes on and on, so please do you or someone you know that is in financial distress a favor and check out this website,
http://www.yourhome.ca.gov/fraud_warning.pdf before “hiring” someone to provide loan modification assistance.
Another source of helpful information is http://www.yourhome.ca.gov/mortgage-help.html.
If you feel the need to seek foreclosure assistance, be aware that, in the words of California Attorney General, Jerry Brown, “California is awash with con artists who prey on vulnerable families facing foreclosure," "By forcing foreclosure consultants to submit detailed information to my office and post a $100,000 bond, this newly created registry will help bring long-overdue transparency to this shadowy world."
Yes, that’s right.....as of July 1, 2009 Foreclosure Consultants must register with the Attorney Generals office and post a $100,000 bond. Consultants that provide the required documents will be issued a Certificate of Registration More details are here: http://ag.ca.gov/newsalerts/release.php?id=1748
Keep in mind, there are qualified and licensed agents offering real help for those that are seeking assistance, so it can make sense to discuss your financial circumstances with a licensed real estate broker or agent that you trust.
My brokerage works with loan modification-short sale negotiators and they do not charge any upfront fees. If you or someone you know needs assistance, give me a call at 951-265-4305 or email me at Janet@janetkleen.com.