They only wanted to keep their home. But they were on disability, had an adjustable rate mortgage with an increasing interest rate and had fallen behind in their payments. The bank couldn’t or wouldn’t offer them a renegotiated loan plan. So when a representative of a loan modification company offered to “save” their home, the couple jumped at the chance. A few months and $800 later, they received a letter from a property management company informing them that their house had been acquired through the foreclosure process and they were being evicted from the property.
[June 22, 2009]—The synopsis listed above is true. Sadly, it is one of many similar stories that the BBB serving Central California hears weekly.
“Loan modification scams are continuing to grow as average people still struggle to meet their home loan obligations,” said Doug Broten, president of the BBB. “The stories are all remarkably the same. The homeowners have nowhere to turn and are highly vulnerable to the vultures who offer them the one thing they want most: to keep a roof over their families’ heads.”
The BBB again is warning homeowners not to pay loan modification companies upfront fees when faced with financial and mortgage difficulties.
Homeowners should always first try to work out a solution with their lender. If that is unsuccessful, there are free mortgage help resources that have partnered with “Facing the Mortgage Crisis,” a community-based organization. Contact information for these resources may be obtained by calling the BBB at 800-675-8118 or by going to www.kvpt.org/mortgage.
In addition, a list of authorized loan modification companies has been issued by the California Department of Real Estate and can be accessed at www.dre.ca.gov.
Homeowners who are considering using the services of a loan modification company should first check their reliability report with the BBB at 800-675-8118 or online at www.bbb.org.
“Homeowners need to realize that the first step, no matter how difficult, is to admit there is a problem and begin to address it,” said Broten. “There is help available, but homeowners need to ask for it while there is still time to possibly fix the situation.”
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