*The purpose of this video is to provide education, not offer legal advice. Please consult with an attorney if you need legal advice.
Unexpected things can occur in life that lead to financial difficulties. You never though it would happen to you but you find yourself a couple of payments behind on your mortgage. You’ve been speaking with your lender and doing everything you’re told to do. One day you get something in the mail that says you’re eligible for a government based mortgage modification program! Reluctantly you decode to call. You’re smart. You’ll be able to tell if it’s a scam. It couldn’t hurt to call. But that’s where you are wrong.
Lets use a real company a homeowner told us about, Home Resolution Center based in CA. Steve, a company representative, tells you during your call that you have to “qualify” to be taken on as a client. After days of submitting paperwork and being “interviewed” you’re told you’re one of the lucky few individuals who’s actually qualified!
The first sign that something is wrong is when you’re asked to pay a high upfront fee for “legal service”.
You’re told you’re guaranteed to get a lower monthly payment and maybe even a reduction on what you owe. You’re advised not to contact your lender or an attorney and maybe even stop paying your mortgage to show you’re in need of assistance. You’re assigned a personal advocate who will negotiate with your lender on your behalf.
Right around the time you’ve sent your last payment to the scammers your lender denies your modification request! Home Resolution Center has known this for days but didn’t contact you. You find out through mail from your lender. You’re in shock. What happened you ask, I paid you all that money and you said it was a done deal!!!??? “Tina,” your supposed advocate who is most likely a chain smoking retired striper with some serious grammar issues, writes in an email, “we don’t guarantee results” and wishes you “good luck”.
You’re now 5 months behind on your mortgage. But how can that be, Tina said all fees would stop accruing during the 3 month application process (your lender later tells you actually it takes 30 days or less to see if you qualify)!
So you’re out all kind of money and owe your lender all kinds of money and you’re now facing foreclosure. Yes you, an intelligent, educated and well-rounded individual just got scammed, as do thousands of people each year.
Folks legitimate companies don’t tell you to stop talking to your lender or to stop paying your mortgage. They don’t claim that all or most of their customers get loan modifications or mortgage relief. And it’s illegal for a company to charge you a penny until:
- it’s given you a written offer for a loan modification; and
- you accept the offer. You must be provided with a document from your lender showing the changes to your loan, and you have to accept your lender’s offer. And the company must clearly tell you the total fee it will charge you for its services.
So the lesson here is: if you fall behind on your mortgage please work with your lender. Only your lender will be able to tell you if your loan can be modified. Real government modification programs are FREE.