Sadly, I am rewriting this blog post series due to a major crash of our website several months ago.  Originally, I wrote a series of several blog posts exposing several scams that I have encountered by talking to people who have spoken with ethically challenged loan modification companies.

First, I want to recommend that you do your due diligence on any company that you are seeking to do business with.  Also, if you have a sense that something is just not right, do with that inner feeling as it is probably your gut instinct protecting you.  With that, I would like to share with you the top 3 loan modification scams I have encountered in working with loan modification clients.

Loan Modification Scam #1 – No Job Required
Getting a loan modification approved requires a detailed process similar to that of qualifying for a mortgage, therefore you have to be able to show the mortgage company where your income is coming from to pay them on the new terms. Keep in the mind that one of the factors that led to the mortgage meltdown was the explosion of stated (overstated) and no income verification loans; many of which defaulted.  It would not make sense for the bank to make the same mistake twice, so if you do not have a job or your cannot qualify based on your taxable documented income, you will most likely not be approved for a loan modification.

Loan Modification Scam #2 – Payment Quotes Over The Phone
I was really amazed to hear that companies were giving people quotes over the phone in an attempt to seduce them and earn their business.  The fact is that a complete file needs to be completed and analyzed before an offer can be made, and chances are that the sales rep on the phone will have nothing to do with the approval process.

Loan Modification Scam #3 – The Over the Phone Guarantee
What I am referring to are those that guarantee by phone that they can get the loan modification done.  This is impossible to do without having documentation fully reviewed, so it someone guarantees they can the job done, end that call as soon as possible.

Also keep in mind that the banks are still backed up with both loan modifications and short sales and the loan modification process can take up to several months to complete.  If you are in a critical situation of have a pending foreclosure, it might be too late, so you need to take action as soon as possible.

A great alternative is to get the resources to do your own loan modification. Most people don’t realize that they can sometimes do a better job (because they are only concerned with one file instead of hundreds). Also, if the banks think a third party company is going to profit, they may not be as likely to help as opposed to knowing that they are helping a homeowner.

Here is a link to a do it yourself loan modification system put together by one of the most successful people in real estate.   He used his system to modify 5 of his own loans and he offers a 100% money back guarantee on his product.

Sadly, there are many scams in the world of loan modifications. Some of the same crooks who created much of this mess are now trying to cash in on once again desperate people.  It is a sad reflection of where we are as a society, but rather than was philosophical, I will discuss a few ways to know if you are dealing with a legitimate company.

Generally, you will be dealing with either an attorney, a loan modification company, a mortgage professional, or a real estate professional.  Keep in mind, that this is a service that is in it’s infancy so few people can claim they have been “doing this for years”.  That in itself would be a tip off that you are at least dealing with someone who is not being up front. Perhaps, they have been in the real estate or mortgage business for many years (as we have), but not as a loan modification specialist as the job did not exist until recently.

Also, just because someone is in the real estate or mortgage business does not mean that they have any understanding of the loan modification process or have a better chance at getting a loan modification approved for you.

In the next three blog posts, I will identify several shady tactics used by some of the scam artists, but in general be aware of any “fast talking salesman” who makes you feel pressured to make a decision.

Lastly, do your due diligence as you would with any other type of service. Many people are too embarrassed to ask others if they know of any reputable companies, so I don’t expect you to do that, but at a minimum do a Google search on the company and also check the BBB for any negative entries. You should also know that not being listed is not an immediate disqualification as the BBB is a for profit entity and many reputable business owners forego paying their fees, however a complaint can be lodged against a company that is not a member, so having a complaint is still a valid negative.

A great alternative is to do your own loan modification. Most people don’t realize that they this is an option or they just don’t know how.  We take the guess work out by showing you where you can get the info.  Visit this link to preview a do it yourself loan modification system put together by a real estate veteran who has been successful in modifying 5 of his own loans. His product also comes with a 100% money back guarantee so if you are in need, check it out today!