Beware of Loan Modification Scams!

With the economy in a questionable state now and foreclosures at record levels, people are obviously concerned about their ability to keep or remain in their homes. These concerns are fueled by all the media coverage exacerbating the situation. When times are difficult and people are frightened, con-artists come out of the woodworks to prey on the mis-informed; especially targeting the elderly segment of our society. The media should be doing more, in my opinion, exposing these scams and warning the elderly to stay away.

I am angry right now. I have an elderly client who is facing some difficulties. She is trying everything to in her power to try to better her current situation and one of the things she has pinned her hopes on is the prospect of some type of loan modification, since she cannot qualify for a re-finance. She heard a lot about this in the news, so she figured it would be her last resort.

What got my blood boiling was that she was going to get a loan modification and lower her mortgage payment by at least $90,000 and save herself at least $900 per month because a lawyer was going to get this done for her. The first question out of my mouth was “did you pay any money?” She had not yet, but she was sold because this lawyer was so good at this that they were asking for a $3,000 deposit, and they guaranteed if they could not save her at least $90,000, they would give her a full refund! I stopped her from moving forth with this super lawyer. (Interesting that they were able to come up with the $90,000 figure without knowing anything about her financials.)

Folks, never, ever, ever ,ever put up money first for any service which claims they will give you a full refund if you are not satisfied with the service. I don’t care whether they are lawyers, doctors or Supreme Court Justices! This is a red flag associated with many scams! If you don’t really know me and I said to you “ give me $3,000 in cash and I will sell your house for $90,0000 above market price or I will give you a full refund” Would you give me the money? Probably not. So, why would you consider giving a lawyer whom you never met $3,000 to save you $90,000 if they have not even seen your financials?

Legitimate loan modifications are done free of charge. There is no guarantee that you will be able to qualify, but you don’t have to put up money first to find out you can or cannot qualify. The fact that they are lawyers has no bearing on the process.

We have to protect the elderly segment of our society. There are a lot of them out there who have already been conned into signing away their homes by unknowingly signing reverse mortgage documents or like this scheme in my client’s situation.

And to the lawyer who tried to reach out to my client: shame on you, I hope you lose your license to practice!