Five Essential Tips to Avoid Loan Modification Scams

Loan modification scams are unfortunately becoming more frequent and troublesome during these tough economic times. If you are not careful about the company or lender modifying your loan, you could potentially lose your loan as well as any other investment you make with the company. In order to safeguard yourself from these scams, be sure to read and utilize the useful tips below.

You May Not Even Need a Loan Modification Company

You actually may not need a loan modification company to modify your loan, although you can be lead to believe so. Through a bit of thorough research or with the use of an attorney, you can take the steps to modify your loan without having the added charge of the company's services. If you are able to afford it, an attorney who is well versed in the loan modification process can be a great resource and help you to get the results you seek.

Check the Company's References

Before you sign any paperwork, you should the company for references and successful cases of loan modification. Reputable companies are ready and able top provide both in order to prove their trustworthiness and successful history with consumers. If the company refuses or cannot provide concrete examples of previous loan modifications or references, then you should look elsewhere to companies that can prove worthy of your time and money. You can also check the company's reputation with the Better Business Bureau and other institutions that highlight companies overall stability.

Avoid Services that “Guarantee Results”

Advertising that the results are guaranteed is a major indicator that the company could be in the market to scam consumers. You should know that the lender or the bank, and not the loan modification company, have the final say as to whether your loan can be modified. It could be more beneficial for you to speak directly with your bank or lender in order to get more information regarding the loan modification process.

There Should be No Upfront Fees

A reputable loan modification company will be able to analyze your case as part of a free consultation. Do not give any money upfront for any reason. The company may try to persuade you to pay for an appraisal, but more times than not, the appraisal is never completed for you. Overall, there is no need to pay any fees for a consultation and you should consider other options if payment is required.

Ask Before You Sign

Ask the loan modification company how much you’ll be able to save through their services. If the company is reputable and has had success with loan modifications, they should be able to give you a fair estimate as to how much you can possibly save by modifying your loan. Should the company refuse or give you a vague answer, then looking to other companies is recommended. In general, ask as many questions as needed regarding the process; if the representative has any trouble giving you an informative answer, then you should find a company that can as it probably is more trustworthy.