I've done dozens of stories about loan modification scams.
They prey on people who have gotten behind on their mortgages, who are in danger of losing their home… or have already received the dreaded foreclosure notice. The scam companies are ruthless, they offer hope and assurance and say they'll take care of everything. The scams are so numerous, even the city of Philadelphia launched an education campaign over the summer to warn people.
So, what do you think I got in the mail? Yep, an offer for a loan modification. Funny thing is, the loan they refer to has already been paid off when I sold the house earlier this year. So, first of all, I'm not behind- don't even have the mortgage anymore. But, if I did, this mailer that I got would scare me. (and if money is getting tight and you're worried about the mortgage- you don't need much to push you over the edge) The outside of the mailer said "Open immediately" and "payment relief notice". On the bottom of the front: "$20000.00 Fine of 5 Yrs. Imprisonment or both for any person who interferes with or obstructs deliver of this…" Scary right? Go ahead and breathe, that's basically the penalty for tampering with mail. But it's scary enough to make me open it right away. Inside, it sounds really official: "The federal Government has designed the Economic Stimulus Act of 2009 to assist homeowners." it goes on to tell me how they will restructure my payments so I can afford to stay in my home. It says in big bold letters, WE CAN HELP SAVE YOUR HOME.
Really?!!! I went on their website to find more information. The only way to contact them was to fill out an on-line form requesting information about loan modification and even though on-line I said I was with the media, looking for comment, I had a sales person ringing my desk phone asking how he could help save my home. The company has been in business three years and had a Better Business Rating of D+. If I WAS in need of a loan modification, any company that uses those kinds of marketing tactics and has a D rating with the Better Business Bureau- would not be the company that gets my business.
If you are in trouble or think you're about to get behind, these are the most important words you need to remember. TALK TO A HUD CERTIFIED HOUSING COUNSELOR- THEY'RE FREE! And PS: the government does have REAL help available. It's called the Making Home Affordable program. http://makinghomeaffordable.gov/
And if you come across a scam, someone who guarantees they can save your home.. Report it: www.loanscamalert.org
