Loan Modification And Foreclosure Scams On Rise As Recession Lingers
Loan modification and foreclosure scams on the rise
Due to the lagging economy and threat of a double dip recession, foreclosure rates continue to rise and loan modification and foreclosure scams are piggybacking all the way.
Locating a viable source of foreclosure relief is vital for any homeowner that is facing difficulty in keeping up with their monthly responsibilities. Whether the hardship is due to an increase of household expenses, loss of income, job loss, or an adjustable rate mortgage (ARM) that has recently matured, getting assistance from lenders is vital to help struggling homeowners stay afloat and in their homes while fending off a pending foreclosure.
“We find that many borrowers in this position tend to just freak out and make a decision before thoroughly thinking about it first,” said AZ mortgage broker Ben Miles.
Oftentimes when a homeowner is seeking options to save their home from foreclosure, contact is made by loan modification or foreclosure prevention companies. While there may be a few legitimate firms out there that offer this type of service, there are literally thousands of predators out there who are looking to scam vulnerable homeowners in distress.
According to Miles, these companies will oftentimes pay thousands of dollars on persuasive marketing as well as guaranteeing assistance in exchange for a base fee. Homeowners are encouraged to be very cautious of any firm charging a fee in exchange for performing a loan modification. Due diligence and vigilant research on the part of the homeowner in distress is key prior to making a decision.
Many homeowners are unaware that a loan modification typically involves changing the terms of their current loan in effort to help lower the monthly payments. Popular options to reduce the payment may include a lower interest rate, changing the loan from an ARM to a fixed rate. Sometimes the lender will even extend the term length of the loan in order to decrease the monthly payment as much as possible.
While there are plenty of legitimate for profit companies out there, the fact remains that there are many more of these companies who can do nothing more than a homeowner could accomplish on their own. Unfortunately, some unscrupulous foreclosure hucksters will make no attempt whatsoever to even contact the foreclosing lender once they have obtained the fee for their service.
A word to the wise for struggling homeowners considering a loan modification is to do a little homework and be on the lookout for foreclosure scams.
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3 Comments for “Loan Modification And Foreclosure Scams On Rise As Recession Lingers”
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Foreclosures on the rise in NC too. Very informative.
What does it say about us when we have so many companies (and individuals) looking to profit on the misfortune of others?
Excellent, great explanation, nice and very simple! Cheers….