Friday, March 26, 2010

Loan Modification Scam Alert

Approximately half of my law firm's loan modification clients had used a loan modification company before finding my firm. The stories we have heard make you want to cry. Taking money and doing nothing. Never calling the client back. Getting a modification for more money in monthly payments than what previously was required. Oh, it goes on and on. Non-attorneys should not be doing modifications. Why? For starters, they lack the necessary tools to get the job done. Like it or not, only an attorney can represent someone in Court. Guess what? Part of a foreclosure proceeding includes a Foreclosure Settlement Conference where a modification can be pushed by a Judge. Also, part of a Bankruptcy proceeding has a similar availability. Moreover, attorneys know about RESPA and the availability of a Qualified Written Request to compel the Bank to produce documents under threat of penalty. In all, attorneys can use the legal system to benefit their clients. Modification companies can just beg for lower payments. This simply does not work. Yes, its important to utilize a Cost-Benefit Analysis, to which a finance degree proves useful, but the finance professional should consult with the law firm, not take the client.

Lets take this a step further. Have you ever heard of a sale and buy-back? That is where someone promises to pay all of the mortgage payments if you just do the small insignificant thing of putting the Deed to the house in their name. That is crazy. In fact, there is legislation that regulates this practice called the Home Equity Theft Prevention Act.

So what should you do if you feel that you are a victim of a scam in the mortgage modification world?

Go to this great website and learn the answers - http://www.loanscamalert.org/