How to Identify a Loan Modification Scam

Many homeowners are hit by a loan modification scam every single day. With all of the problems that are out there associated with mortgages, there are undoubtedly a lot of people looking for a solution. Sometimes, their eagerness to find an answer to their problems leads them to make unwise decisions. They look in all the wrong places and end up finding a loan modification scam waiting for them on the other end. This could lead to you losing a substantial amount of money along the way. When you are already hurting financially because of your mortgage, these scams could end up hurting you a lot worse. Here are a few things to help you stay away from loan modification scams.

Upfront Fees

The biggest tipoff that it could be a scam is when the company in question asks for money upfront. Anytime anyone is asking you for a substantial amount of money on the front end of a deal, it usually leads to trouble. They come in and tell you that they can solve all of your problems for a fee as small as one month's mortgage payment. However, this usually leads to you completely wasting a mortgage payment that could have been used to pay the mortgage. 

Most of the time, they take the money and do nothing with it. You are left in exactly the same situation you were in before you agreed to the deal except you have less money now. If anyone asks you for a sum of money upfront you should usually just forget about the program all together. 

Unreasonable Promises

Many of these companies make promises that they cannot deliver. They will send you a piece of mail that tells you that they can do some amazing things with your mortgage. They can renegotiate the loan for you, lower your interest rate, and your payment for you. They will even guarantee that they can do this for you or you will get your money back. 

First of all, no one can guarantee anything in this industry. If you see something to the effect of a guarantee, then you need to forget about it. They are obviously a scam. If the promises that they make in the sales letter sound too good to be true, then they probably are. You need to examine each promotion carefully. Make sure that the results that they promise sound at least reasonable. If they are not, then you should turn around and run.

Unsolicited Offers

While getting an unsolicited offer in itself does not make something a scam, almost all scams will be in the form of unsolicited offers. Therefore, if you get an unsolicited offer and it meets some of the other criteria of being a scam, then you can feel pretty comfortable in labeling it a scam. They might approach you through mail, on the phone, or even in person. Regardless of how they do, if you feel uncomfortable, just ignore them and move on.