Who’s that dude in the mask? He’s the guy you paid $2500.00 to modify your loan. Seem strange? Maybe. But that’s what thousands of borrowers have done and will continue to do out of desperation. Anthony Cuomo, New York Attorney General, is doing what he can to put a stop to bad loan modification companies in the state. A widespread investigation continues about fraudulent activity prevalent with mortgage modification. Massive “cease and desist” letters have been sent warning them to “immediately end all misleading and illegal conduct.” Over 200 companies have been put on notice.
Cuomo’s office has determined that these firms have been collecting illegal upfront fees from homeowners on the brink of foreclosure but fail to help them lower their mortgage payments or save their home as promised.
The cease-and-desist letter from the Attorney General warn mortgage rescue companies to discontinue any illegal, deceptive, and misleading practices, including charging upfront fees for consulting services and failing to enter into written contracts with homeowners in the language homeowners use that fully disclose the exact nature of the fees and services to be provided.
If Cuomo sent notices to over 200 companies, we know there are probably many more out there. Multiply that by 50 states and this problem is out of control.
Cuomo’s initiative solely applies to the State of New York. However, New York does not stand alone. This abuse is going on across the country. Anyone who is approached by such a company should be aware of the possibility that the company is only seeking to enrich themselves. Sad, but true. As you can see, there are countless people out there preying on the chance to make a homeowner’s situation even worse. They will take your money and run. They are pure scum of the earth. There is no worse villain walking the streets than one who’s mission is to push a homeowner into a deeper pit. Many of the scamsters have actually caused foreclosure as the homeowner waited and waited and waited for the promised loan modification when suddenly the sheriff sale was announced. Time out. Home lost.
You must investigate any company that claims they can help you out of your dilemma. Start by typing their name in Google. Look for basic company information and complaints. If the company cannot be found in Google, that is a serious bad sign. Do you want to send $2,000 to a business that can’t be located? Likewise, if you do find them and their site lacks complete contact info, again, that’s a bad sign. If they only advertise a P.O. box, bad sign. If you cannot find their listing with directory assistance or whitepages.com, run fast. And check to see if they have a business license in your state.
I am often asked if companies will do a loan modification at no cost. Well, there is work involved in providing loan mod services, so a for-profit business cannot work for free. We all go to work every day to get paid – most of us. Options for no-cost services lie with your lender and/or non-profit organizations. Do a search for non-profit assistance in your area. HUD housing counselors provide free services.
If your home is in New Jersey, let me remind you about New Jersey requirements for those offering loan modification services. See my earlier post here. I also posted a list of resources here.
Proceed with extreme caution if you decide to pay for loan modification services.
Til my next post . . .
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