How to Spot Loan Modification Scams
Be Careful and Explore Options
Loan Modification businesses have been popping up all over the country the past two years. Some are legitimate business efforts, but many are not. Recent Florida statutes intended to reduce growing fraud specifically forbid the taking of any up-front fees for loan modification services not performed and dictate some very specific disclosures for loan modification service contracts.
Some warning signs of a potentially fraudulent approach are:
• Claims to be affiliated or licensed by the government or a federal program to prevent foreclosure
• Any requirement to pay an up-front fee
• Anyone who urges you to act fast to avoid losing your home
• Claims to be a “foreclosure prevention specialist” or similar
• Websites and marketing materials with no local contact numbers or office locations
At this time, there is no licensing requirement for entering into the loan modification business. Attorneys, real estate agents, and mortgage brokers are often involved, but no specific licensing or certification is required. So, be careful and learn how to spot a “wannabe expert”.