How to Determine If a Loan Modification Company Is a Scam by Rob K. Blake

In times of economic distress, lots of people seek loan modification. That is why there are many scammers who want to take advantage of the situation. So it is crucial to know how to determine a scam operation.



You have to admit it, bad times and disasters can bring out the best and the worst in people. The sad thing is that those who are really destitute are the ones being victimized by scam artists. This situation is worse in the homes market. Troubled homeowners are desperately seeking mortagage loan modification in order to save their houses. Because of this, they become easy prey for scammers.



Why Loan Modification Scams Abound Today



Criminal elements are very keen on spotting opportunities. They know that there are so many people who are facing the prospect of home foreclosures. These criminals understand the fact that modifying the mortgage is probably the best and only option for troubled homeowners. That is why they will run a so-called loan modification outfit and take advantage of the vulnerabilities of homeowners.



You have to remember that it is very difficult to spot a scammer. So how can you tell if the company that you are dealing with is legitimate or not? Fortunately, there are signs that you have to watch out for in order to distinguish a legitimate company from a scammer.



Red Flags That You Have to Watch Out For



First, you have to be on the look out for a loan modification company that does not require much information and documentation. Remember that the procedures involved in loan modification require substantial amount of documentation and paper work. So it is a big red flag if the company will not ask for your paper work. If the loan modification consultant tells you that all you got to do is to pay the fee and you are already set for application, then this consultant and his agency are running a scam operation.



Second, you should be wary of a company that charges upfront fees for consultation. Most or all legitimate loan modification professionals offer free consultation so you can properly weigh your options. Be on the look out for so-called consultants that will get fees from you for the first meeting.



Lastly, beware of companies or consultants that demand cash payments and money order. This is their way of avoiding the paper trail. If you pay cash, there is no way for you to trace the scammers and you can not sue them. It would be best to pay the loan modification consultants through check or credit card.



Although there are scammers out there, this should not be a reason why you have to stop pursuing loan modification option. Remember, modifying your mortgage can really help in saving your house from foreclosure. You just have to be very careful in dealing with financing companies and consultants.



Mortgage loan modification is a good option to save your home from foreclosure. But make sure to practice caution when dealing with consultants. You have to distinguish legitimate outfits from a scam operation.


Rob K. Blake, home loan expert and author, educates mortgage shoppers on finding local providers by state like Louisiana Mortgage Brokers and Lenders and provides reviews of national companies like Alternative Home Financing.



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