LOAN MODIFICATION SCAMS AND FORECLOSURE PREVENTION
Are you behind in mortgage payments?
Do you want to modify your loan but unsure how to do it or whom to trust?
Are you about to lose your home due to foreclosure?
Do you think you're getting scammed?
According to the California State Bar, from 2009 to 2014, California homeowners submitted over 13,000 foreclosure scam complaints. In L.A., in the last five years, nearly 1,000 scammers have been alleged to target vulnerable homeowners. Although mortgage fraud has dropped since the height of the foreclosure crisis, mortgage fraud is on an upward trend as the housing market continues to recover. Moreover, many HAMP and HELOC loans are still underwater and are scheduled to either expire or reset in the next few years. Increased monthly payments will increase homeowners’ vulnerability to foreclosure rescue scams.
KNOW YOUR RIGHTS
The California Homeowner Bill of Rights became law on January 1, 2013 to ensure fair lending and borrowing practices for California homeowners. These include:
Restriction on dual track foreclosure
Mortgage servicers are restricted from advancing the foreclosure process if the homeowner is working on securing a loan modification.
Guaranteed single point of contact
The single point of contact must know the facts of homeowner’s case, have his paperwork and can get him a decision about his application for a loan modification.
Verification of documents
Lenders are required to record and file verified documents.
Borrowers will have authority to seek redress of “material” violations
Prohibition of Advance Fees
California law prohibits upfront or advance fees for residential loan modifications and mortgage loan forbearance services.
QUESTIONS TO ASK YOUR FORECLOSURE CONSULTANT
What specific services will you be providing?
Get this in writing, understand what the contract says and what the end result will be before proceeding. Remember to always ask for and demand copies of all documents that you sign.
Are you licensed by the California Bureau of Real Estate? If not, why not?
Check here: Bureau of Real Estate
Where and when was your business formed?
Verify the information and/or determine if the business is allowed to operation in California. Check here
How many transactions/services of the type that you are advertising or offering have you successfully performed?
Are you a specialist in this area? If yes, ask:
What specialist qualifications do you have and what does this mean?
Do you have a list of current and past "satisfied" customers? If so, get it and call them. Ask if they would use this person or business again.
FRAUD WARNING SIGNS
Be extra wary if you:
Are asked to pay a real estate agent directly, or are asked to pay upfront fees.
Are dealing with unlicensed agents or unlicensed brokerage companies.
Are dealing with “attorney-backed” businesses or law offices that refuse to provide an attorney’s name or State Bar number.
Are not provided with required State and Federal disclosures early in the real estate transaction.
Come across programs and companies that claim to represent Federal or State agencies or programs.
Are offered a “forensic loan audit.”
Are asked to pay cash.
Encounter unwillingness to meet in an actual office, or lack of an actual business office or refusal to meet in person.
Are encouraged to make payments to someone other than your servicer.
AVOID BEING SCAMMED
1. Don't pay up-front fees.
2. Don't ignore letters from your lender or loan servicer.
3. Don't transfer title or sell your house to a "foreclosure rescuer."
4. Don't pay your mortgage payments to anyone other than your lender or loan servicer.
5. Never sign any documents without reading them first.
RESOURCES AND LINKS
Groups providing FREE Loan Modification Counseling:
HomeStrong USA (a Keep Your Home California program provider)