Mortgage Reduction: Real or Fake?

 When I am speaking to potential clients, one of the biggest questions that I get is “how do I know that you aren’t just a scam artist?”  As a person that genuinely likes to help people I feel the need to separate myself from the “law groups” or the “specialists”. Forgive me if I am adding a personal tone to this post, as this is my business, therefore my lively hood, I take this personally.

Signs of a Loan Modification Scam:

1.       Guarantees- No one can guarantee anything. It does not matter what the situation holds, your lender can do whatever they want. Many of these companies call you to sell you a dream. Don’t deal with these kinds of companies.
2.  Upfront Fees-No company is allowed to charge an fee up front for a loan modification. Period. The Federal Trade Commission http://www.ftc.gov/opa/2010/11/mortgage.shtm posts that it has been cracking down on these guys for years. Charging an upfront fee to modify your loan is illegal. They charge outrageous prices from $1500 - $3000 and even break them down to monthly payments. When you see prices like this RUN! Lawyers are calling these retainer fees, but at the end of the day, you still wait an average of 6-8 months and the bank can still deny you. Then what do you do? You have just lost a significant amount of money and the lawyer is going to suggest bankruptcy in which they will receive another payment from you. Even wen companies charge you after the work is done, you can expect words like percentage, which is probably going to wind up being more money  than what you are prepared to pay. 
   *note* if you are purchasing an actual product that you can use, it is legal, and the company  must give you term of an agreement and have you sign off that you know that you are purchasing a product and not a service.
3. Trade Secrets- there are no trade secrets. If a sales person tells you that they are not allowed to give out the trade secrets, hang up, or walk out. Mortgage modifications deal with Debt to Income ratios and you must fall under qualifying guidelines. If they can’t express how they can help you or how their product can help you, they are probably not going to help you.

I personally believe that transparency is the key to any business relationship. If you are speaking with a company, group, or person about helping you with your mortgage crisis, they need to be a wealth of info. If they are unable to answer any questions or they give you a one off answer and get back to what they want to talk about (90% of the time it’s about your payment), you probably need not do business with them.

Trust and comfort are the key words in this kind of relationship. Should you speak with one of these kind of companies and you feel that you need someone to help, make damn sure that they are willing to bend over backwards to not only earn your trust but your money as well. If you ask for an email and they say that they don’t or won’t do that, they don’t want to earn your trust or money. Also ask them how you are protected if they are a scam. A scam artist won’t tell you how to put them in jail.

I know that this is a personal rant, but I deal with this question all of the time so I find it necessary to address the question publically. Let me know what you think.