This lie takes two forms. One is where a "Loan Counselor" demands you pay an upfront fee, usually in amounts of $1,500, $3,500 - even up to $5,000. In some states it's against the law to do that. Which should tell you something. As more and more people get ripped off by paying fees for services never received, more states are pursuing criminal rather than civil statutes. You can find out if your state is one of them by contacting your states Attorney Generals office.
In addition to writing new laws, most (if not all) states require loan brokers
and consultants to be state certified. All make it available, but the requirements vary from state to state so it's not a bad idea to check into it. It can help you judge whether or not your prospective helper is legitimate.
The second form of lie #1 is when the "consultant" tells you to stop making your mortgage payment and send the money to him or her instead. This is a GIGANTIC red flag. Whenever a counselor suggests or knowingly takes your mortgage money - look out! NEVER stop making your mortgage payment unless you simply don't have the money and can't pay it. Your counselor/consultant can take the money and run, leaving you that many payments closer to being out of your home.
Common Lie #2: "I Guarantee I'll Get Your Loan Modified or Refinanced".
Here's the truth. NO ONE except the lender will make that decision. Not you. Not your counselor. Not your attorney. Not even Barak Obama. No one. So it CAN'T be guaranteed. If an unscrupulous scam artist guarantees they can get you into a new loan or new terms on your existing one they are simply lying. The most they can promise to do is help you. Not guarantee the outcome
(Note: This isn't the same as a money-back guarantee from an online info product. A low cost manual explaining government programs in a simple step-by-step format, along with necessary forms and instructions on how to use them, is simply a an information product. And it's OK to offer a refund of your purchase price if using the information hasn't helped you. The guarantee is for your satisfaction - not the outcome. There's a difference.) Plus you can get kits for anywhere from $12 - $89. No where near the risk of $1,500 - $5,000.
Common Lie #3: I Can Get Your Mortgage Modified Fast!
Another common lie. People facing foreclosure normally feel under a lot of pressure and desire immediate relief. Scammers realize this and take advantage of it. They attempt to distract you with tactics designed to heighten your fears - then ride in to the rescue with a promise that if you'll pay them today (100% upfront, of course), you'll be the proud owner of a friendlier mortgage within the next 2 or 3 weeks.
The facts? Expect a minimum of 30 days before your application will even be considered.
They're just too busy now - especially with the new government programs that have been designed to help an estimated 9 million US Homeowners stay in their home.
The scammers ARE telling the truth about one thing though. If you're in danger of losing your home via foreclosure it's important to act as quickly as you can. And the more armed you are with the information your lender requires, along with the knowledge of how to present it, the better your chances of getting the most ideally structured mortgage available for your unique situation. And since you're talking about a difference of potentially thousands of dollars, it's well worth the effort!
