Homeowners who are no longer able to afford their mortgage payments are often faced with a difficult choice between foreclosure, short sales, or attempting a loan modification. For families who want to stay in their homes, loan modifications are often the best option, but many people need help to secure a modification that will actually benefit them.
There are many services out there that offer to help homeowners, but like companies that offer to consolidate debt for free, consumers should be wary of possible scams and fraud. In fact, fraud surrounding loan modification offers has increased in recent years. Advocates for consumer protection say that some of these fraudulent operations involve attorneys or people posing as attorneys, making it harder for homeowners to identify a possible scam.
It is very disheartening to hear that some attorneys are not providing legitimate services for their clients to help them avoid foreclosure. These services are so essential to families in Georgia and around the United States, and the success or failure of a loan modification effort affects much more than just finances.
The foreclosure process can be very stressful and in addition to the financial tolls and the difficulty of leaving the family home, stress from these types of issues can cause health problems as well. This is why it is so important to work with a trusted and experienced advisor rather than trying to negotiate with banks alone. Negotiating a loan modification without representation can be very confusing and it may be difficult to determine whether or not the bank has created a new binding agreement.
In addition, as this story illustrates, some people offering loan modifications are not actually experts who can help. Since 2010, about 28,000 homeowners have made reports about potential fraud in the loan modification process. The Homeownership Preservation Foundation estimates that financial losses for those individuals totals about $66 million.
Source: New York Times, "Avoiding Loan-Modification Hoaxes," Lisa Prevost, Jan. 10, 2013.
Our Gainesville law firm helps advise clients on loan modification and other types of mortgage assistance. More information is available on our foreclosure prevention page.