Watch Out for Loan Modification Scams

For those struggling to make or those who have fallen behind on their mortgage payments, bankruptcy may provide a solution for homeowners that want to keep their homes.

2010-09-25

September 25, 2010 (Press-News.org) Watch Out for Loan Modification Scams

The combination of the recession, high unemployment rates and the crash of the housing market has left many homeowners struggling to make their mortgage payments. However, as the saying goes, in difficult circumstances comes opportunity. Unfortunately, for many homeowners, those taking advantage of the opportunities presented by these difficult times are loan modification scammers.

For those struggling to make or those who have fallen behind on their mortgage payments, bankruptcy may provide a solution for homeowners that want to keep their homes.

Modification Scams

Not every company is in the business of helping you keep your home. Some, in fact, do not care if you keep your home or not, they just want your money. Some of the most common loan modification scams are:

Bait-and-Switch -- a scammer will ask you to sign documents that you are told are for a loan modification that will "make your existing mortgage current." Buried in the fine print of these documents, however, could be language transferring the title of your home over to the scammer.

Rent-to-Own -- also known as a "lease-back," in this scam you conditionally sign over the title to your house to the scammer with the "understanding" that you will stay in your home as a "renter," and that you will be able to purchase your home back at a later date. Oftentimes, though, the scammer never intended to sell your home back to you and will even draft the contract in such a way that it is nearly, if not completely, impossible for you to reclaim your home. The scammer may even raise your rent to the point that you miss payments, giving them legal authority to evict you. After you are evicted, they can sell the home and keep any profits.

Fake Counseling Services -- this fraud is based upon the word of a con man who tells you that he can negotiate with your lender on your behalf to save your home. However, there is a catch: you have to pay all the fees for this service up front. The scammer will likely ask that you not contact anyone, as they will do this for you -- this should serve as a warning that the transaction is a scam. Another tipoff that you are dealing with a scammer is that you may be asked to pay your mortgage payment to the scammer directly and not your lender -- do NOT do this.

Phony "Government" Programs -- these bogus programs involve a scammer who offers to help you enroll in an allegedly government-approved loan modification program. The caveat being, of course, that you have to pay a high up-front fee to "qualify" for the program. These fake programs may be difficult to spot, even if you conduct due diligence since everything, including the scammer's website, may seem official. Consult with your lender if you are contacted about one of these programs, as your lender will know if you qualify for any legitimate government programs or not.

Mortgage Lender Tricks

Mysterious third-party companies are not the only ones taking the opportunity to trick borrowers; your lender may try to deceive you as well. (Please remember that most lenders are reputable, but there are a few that may try this.) Be on the lookout for these signs that your lender may be trying to trick you:
-Continually telling you to call back to discuss your issues, without ever actually talking to you about your issues
-The lender tells you one thing, then either does another or does not honor what was told to you
-The lender tells you miss a payment(s)

Always make your payments if you can. If you miss payments, your lender may foreclose on your home.

Tips for Avoiding Scams

Not all fraudulent mortgage-related schemes are easy to discover. However, you may be dealing with a scammer if you are:
-Asked to sign your deed over to the company
-"Advised" to stop paying your mortgage payment to your lender and told to send the payment to the new company
-Given a "guarantee" that the company can get your loan modified or that the company can stop foreclosure
-Asked for a fee before the company can begin to work on your behalf
-Offered participation in a government-approved loan modification
-Asked for your personal financial information over the phone or online

The Bankruptcy Option

If you are behind on your mortgage payments and facing foreclosure, there may be an alternative to seeking the help of a loan modification company. Working with an attorney to file bankruptcy could help halt foreclosure proceedings and allow you to keep your home.

Chapter 13 bankruptcy, also referred to as "wage earners' bankruptcy," allows a debtor to restructure his or her debts into a monthly payment to be made over a three to five year period, after which the remaining debt is discharged.

One of the benefits of Chapter 13 bankruptcy is that it allows homeowners that are facing foreclosure to halt or stop the proceedings. The debtor is then allowed to fold the missed or late mortgage payments into the Chapter 13 repayment plan, paying them over the course of several years instead of in one lump sum. However, it should be noted that the debtor needs to keep current on the payments throughout the bankruptcy repayment period or risk foreclosure of the home.

To discuss your situation and discover if bankruptcy is the right option for you, contact an experienced bankruptcy attorney.

Article provided by George R. Belche, Attorney at Law, LLC
Visit us at www.bankruptcygwinnett.com

ELSE PRESS RELEASES FROM THIS DATE:

Considering a Loan Modification? Consider Bankruptcy Instead.

2010-09-25

Considering a Loan Modification? Consider Bankruptcy Instead. The crash of the housing bubble has left many homeowners in homes that are now not worth what was paid for them. The current economic crisis and rise in unemployment are leaving many homeowners with mortgages they cannot afford for houses that they cannot sell. As a result, there has been a rise in loan modification programs. Loan modifications sound appealing because of the promise to work with the lender to lower payments, allowing the distressed homeowner to keep their home and avoid foreclosure. These ...

Protecting Loved Ones from Elder Abuse

2010-09-25

Protecting Loved Ones from Elder Abuse According to the California Attorney General's office, more than 200,000 Californians over the age of 65 are subjected to elder abuse each year -- and the problem is not expected to get better any time soon. With a population of 3.7 million elderly, California already has the largest number of elderly residents in the nation. This number is expected to double in the next 20 years. As the baby boomer population enters their golden years, the number of people who need assistance from family members and long term care facilities ...

Fair Sentencing Act Reduces Disparity for Cocaine Sentences

2010-09-25

Fair Sentencing Act Reduces Disparity for Cocaine Sentences In August, President Obama signed the Fair Sentencing Act into law. While the act does not eliminate federal sentencing disparity between crack and powder cocaine offenses, the mere fact that it occurred is a surprising criminal justice reform. Ten years ago, those working to repeal the 100-to-1 sentencing disparity were dismissed as "soft on crime." The 1986 law was enacted at a time when many expected the crack cocaine epidemic affecting minority communities would cause a broader crime wave, which never ...

Report Offers Denver A Glimmer of Hope, But Economic Struggles Persist

2010-09-25

Report Offers Denver A Glimmer of Hope, But Economic Struggles Persist According to the latest Mountain Monitor report from Brookings Mountain West, the Denver area's gross metropolitan product (meaning the value of all of its produced goods and services) has almost returned to pre-recession levels. In the second quarter of this year, the gross metropolitan product was just .1 percent lower than its highest levels before the recession began. Perhaps surprisingly, though, this overall return to productivity is not reflected in employment rates. As the report indicates, ...

Another Alleged Police Brutality Incident Shakes Florida Law Enforcement

2010-09-25

Another Alleged Police Brutality Incident Shakes Florida Law Enforcement A recent suspected case of police brutality, this time resulting in the serious injury of 38-year-old Bamako Walton of Roodhouse, is putting the spotlight back on the actions of Florida's law enforcement officers. While the facts are still not completely clear, it is known that Walton was the passenger in a vehicle pulled over by an officer with the Jacksonville Police Department in the early hours of August 8, 2010. What remains to be seen, however, is how he ended up with multiple facial contusions, ...

Presumed Occupational Diseases for Firefighters and Police Officers

2010-09-25

Presumed Occupational Diseases for Firefighters and Police Officers Maryland Annotated Code, Labor and Employment (LE) Article, 9-503 states that firefighters and police officers are given a presumption of compensability for certain occupational diseases if they contract heart disease or hypertension that results in "partial or total disability or death." Additionally, if a firefighter develops lung disease or certain specific cancers that results in partial or total disability, that firefighter is given a presumption of compensability that the disease was "suffered ...

Florida Sinkhole Claims Extending Beyond Sinkhole Alley?

2010-09-25

Florida Sinkhole Claims Extending Beyond Sinkhole Alley? Pasco and Hernandez counties are well established as the centers of sinkhole activity in Florida; Florida lawmakers have gone so far as to craft unique laws governing insurance coverage for sinkholes in these two counties. However, anecdotal evidence suggests that the problem may be spreading, with sinkholes reportedly appearing as far south as Miami and Naples. Florida Insurance Commissioner Kevin McCarty has requested claims data from both commercial and residential property insurance companies, with the ...

New Emphasis on Curbing Medicaid Fraud

2010-09-25

New Emphasis on Curbing Medicaid Fraud In 2009, President Obama revealed that Medicare and Medicaid are the biggest drivers of the federal deficit and debt. Both programs are crucial to the health care industry in the United States; however, crippling waste, abuse and fraud cost the system $60 billion annually. As such, the Obama administration seeks to crack down on Medicaid and Medicare fraud. Reports of flagrant Medicaid and Medicare fraud prompt public outcries. Consider the case of Elizabeth Corbitt, who in August was arrested on 419 counts of Medicaid fraud ...

Report on State of Oregon Hospitals Released

2010-09-25

Report on State of Oregon Hospitals Released In 2008, the Oregon Patient Safety Commission (OPSC) set a simple goal for itself - become the safest health care delivery system in the United States. The OPSC set out procedures and standards to measure progress in hospitals across the state. Noting that Oregon's level of care was only "average" by any measurement, the OPSC's objective was to use these standards to improve patient safety. The standards asked five main questions: -Can we demonstrate that we are eliminating preventable harm events? -Are we using evidence-based ...

The Costs of Medical Errors

2010-09-25

The Costs of Medical Errors According to a recent ABC story, a study confirmed anecdotal evidence of the "July Effect" - a rise in medical errors during the month of July, when new residents fresh out of medical school report to their teaching hospitals. A 2000 publication by the Institute of Medicine indicated that up to 98,000 Americans may die each year as a result of preventable medical errors. Though the qualitative costs of medical errors can be devastating, a recent article in The Wall Street Journal says the quantitative costs can also be staggering. Citing ...

Watch Out for Loan Modification Scams

ELSE PRESS RELEASES FROM THIS DATE:

LAST 30 PRESS RELEASES: