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Loan Modifications – Homeowner Beware!

Loan ModificationIt seems they’re everywhere. You can’t get away from them. They capture you in your car. They have official looking TV ads. They’re even on your computer screens when your surfin’ the net. “They” are the Loan Modifiers -Companies who provide a service to consumers to help get their home loans modified so the consumer can stay in their home. The problem is there is often a hefty upfront fee before they even begin “working” with your lender. And, yes, they’re even willing to let you miss a mortgage payment, so that their fee can be paid. The fees, often several thousand dollars, are monumental for those seeking some sort of mortgage relief and there is no guarantee that the modification will be granted by your lender.

The California Attorney General has already taken action against a few of the worst offenders. Now the State Bar of California is doing their part by listing 16 attorneys under investigation who are engaged in loan modifications.

San Francisco, September 18, 2009 — The State Bar of California, alarmed by the number of lawyers preying on vulnerable homeowners, today identified 16 attorneys who are under investigation for misconduct related to loan modification.

“In my 21 years in attorney discipline, I have not seen a crisis of this magnitude. It is truly unprecedented,” said Interim Chief Trial Counsel Russell Weiner, who is waiving investigation confidentiality in favor of public protection. The waiver, allowed by law, is used only occasionally, but Weiner said the seriousness of the problem demanded a strong reaction by the bar in order to protect consumers. This is the first time the names of more than a few lawyers being investigated have been made public. Click Here to read the full story (includes the list of attorneys under investigation)…

I hear many stories of people being taken advantage of by these schemes with little to no result. Consumers end up in far worse financial shape than when they began the process with the loan modifier. Consumers would do better by using a low-cost or free service from local non-profit agencies skilled in working with lenders and consumers on credit and mortgage-related issues. In Ventura County, I know of 2 agencies that can assist.

I am obviously out-gunned in the war against fraudsters, so Homeowner Beware! Choose carefully when seeking financial assistance and question those seeking you out. These companies are in business…and like all businesses, they’re in it to make money, regardless of the financial position it puts you in.

(This article was written by my fellow agent and collegue at RE/MAX Gold Coast REALTORS , Janet Dorsey.)

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