In foreclosure? Watch out for fraudulent loan modification programs
Yesterday I wrote about the dubious value of for-profit debt settlement companies in the context of credit card and other unsecured consumer debt. Today’s New York Times has an article about congressional efforts to fight back against similar companies that prey on desperate homeowners in foreclosure.
Like debt settlement companies, these mortgage modification companies promise to obtain favorable loan modifications for homeowners behind on their mortgage payments. As the article notes, many of these companies demand large up-front fees and then fail to deliver a loan modification. The companies intentionally mislead consumers into thinking that their services are part of the Obama administration’s efforts to help with the foreclosure crisis.
Consumers in foreclosure should exercise extreme caution when dealing with for-profit mortgage modification programs. If you need help negotiating a modification with your mortgage, there are many government and non-profit programs that will provide real assistance.