You’re in a tough situation…one that may challenge clear thought in even the clearest of thinkers. But, this is a time when you really must be alert when dealing with someone offering to help you modify your mortgage loan…or avoid foreclosure.
Although there are legitimate third party companies who have been able to help homeowners effectively work things out with their lenders, you don’t have to have a third party work with your lender. If you do engage a third-party, they should make the process easier…not harder and more expensive.
Here are ways to protect yourself:
- Who to talk to first – First things first…be sure to contact your lender or mortgage servicer first. Talk with someone in their loss mitigation department to find out your mortgage loan modification options…as well as other alternatives to foreclosure.
- Mortgage loan payments – Send all mortgage loan payments directly to your lender or mortgage loan servicer. Don’t trust others to make mortgage payments for you…and don’t stop making your payments.
- Avoid paying large up-front fees – Even though some legitimate housing counselors will charge small fees for their services, don’t pay large up-front fees to anyone before receiving their services. And, be sure you’re dealing with a legitimate organization.
- Don’t sign over your deed without consulting an attorney you select – Home foreclosure scams often involve the transfer of ownership of your home to a scam artist or another third party. Never agree to this without getting the advice of your own legal representative, financial adviser, credit counselor, or other independent person you know you can trust. By signing over your deed, you lose all rights to your home… and any built-up equity. And, you are still obligated to pay the mortgage.
- Get promises & agreements in writing. Oral promises, agreements, and handshakes relating to your home are generally not legally binding. Protect your rights with a written document or contract signed by the actual person who is making the promise. Don’t forgo this important step because you think you might offend them. Anyone who is operating above-board should have no problem with documenting their promises or agreements with you. Be sure to keep copies of all of the contracts you sign.
- Report suspicious activity – When you detect suspicious activity, report it to relevant federal, state, and local consumer protection agencies. Report scam artists and suspicious schemes so that you can help prevent others from becoming victims. If your complaint or question involves a national bank…and you can’t resolve it directly with the bank…contact the Comptroller of the Currency’s customer assistance team by calling (800) 613-6743, by sending an e-mail to customer.assistance@occ.treas.gov, or by visiting www.HelpWithMyBank.gov
- Know what you’re signing – Did you notice this is actually a 7th way to protect yourself from loan modification & foreclosure avoidance scam? And, it should really be before #6 above. Noticing details is important, especially when you’re signing legal documents. Read and understand every line of every document you sign. Don’t rely on oral explanations of a document or contract you’re signing. Otherwise, the document may obligate you to terms you don’t want…or may even transfer ownership of your home to someone else. Never sign documents or contracts with blank spaces that can be filled in later. Never sign a document that contains false statements or errors…even if someone you’re dealing with promises to correct them. If a document is just too complex to understand, get advice from a legal representative you trust or a legitimate, trusted financial counselor.