By Moe Bedard
Yet another Mortgage Modification Fraud alert was posted on CNBC this morning. Former Department of Housing and Urban Development consultant Howard Glaser warned “The bloodsuckers and bottom feeders are out.” More and more attention is appropriately being placed on mortgage scam artists by the mass media now and I think it’s a good thing. A great deal of attention on so called loan modification companies that are operated by former subprime lenders is the focus of this video. CNBC’s Diana Oleck referred to these loan modification company operators as “…con artists previously selling bad loans.” In the wake of the subprime lending environment, where loan officers could make an easy buck, it seems these same offenders are now at the forefront of the loan modification scams across the nation. Hopefully, more media coverage like this will protect consumers from paying up front fees for a loan modification to the same people that put them in a bad loan in the first place.
{ 13 comments… read them below or add one }
Are all companies that charge up front, even with a guarantee of satisfaction, a rip-off? Is there info on which co’s are a rip-off and any that are legit. Thank you a lot. I am talking to several right now. HELP. Bob Berger bobberger@yahoo.com
I agree! We need oversight to elevate responsible firms that provide a vauable service. I just wish we could get the regulation roller coaster behind so we can focus on helping homweowners.
Modifying your loan (changing terms to better suit your needs) is becoming increasing popular as lenders realize the true costs of foreclosing and settlements are reached with large lenders to force modification.
If you have had a recent financial hardship, job loss or change, divorce, illness, or family problems, you may be able to qualify for one of these programs. In addition, your loan docs may have been drawn incorrectly causing a “truth in lending” or other such violation that makes lenders eager to correct when faced with legal pressure.
Not all companies that take up front fees are scams. I manage a company that charges an upfront fee. We have in house over 350 files and have been in business for over a year now with no complaints from our past and current clients, which can be reflected on the BBB.
The company I work for collects an upfront retainer as a “good faith” deposit. It’s fully refundable if we don’t get the modification done.
We can’t take the chance of putting in the work and never hearing from the client again. That’s wasted time and money on our part and takes time away from those that are committed to getting their modification done.
I’d love to see a state license required like other professions. It would help separate the legit from the unethical.
So, what do you do when there is a notice of default posted on the property? Are you a lawyer?
We are a back end wholesale operation that processes for other attorney firms though we are also attorney staffed. That said, the modification process is non-legal work.
Even when the NOD is filed proper contact with the lender, submission of the modification package along with the client actually being eligible for the mod will still redeem the situation. We have often stopped and/or suspended sale dates as close as 48 hours from the sale with proper contact with the lender.
Honestly I really do hope these bottomfeeders get locked up. Our economy is already failing and legitimate companies trying to help consumers are actually being crucified because a bunch of selfish mortgage brokers are pissy at the world because their number is finally up. Before I did loan mods, I was real estate investor and I can’t tell you how many times these brokers tried to get me into a toxic loan. Too many people fell for it and now responsible borrowers are LOSING their HOMES. It’s ridiculous and it makes me cringe that these brokers (who are now naked and unemployed) decided to continue to destroy our economy by further ripping off every person they come in contact with. And I am not saying that all mortgage brokers are evil. They are not alone in sharing the blame. I myself took advantage of rising real estate prices to re-fi my house twice. But in the end, it is not who is to blame but what we as citizens and consumers will do to fix it and protect ourselves from being scammed.
Oh BTW, in my opinion putting Loan Modification Specialist by your name is not a good idea. I don’t think this site is up for people to self promote, but rather for consumers to get educated and vent a little bit.
To clear the air about taking an upfront fee. In regards to my company and our services; we do take an upfront fee, but we hold the homeowners money in an attorney’s escrow account. This is used to protect the client. The money is held and not released till services are rendered, or the client requests a refund.
I agree Marcela! This website has been one of my favorite tools, WAY TO GO MOE!!!
Homeowners remember that you should do your due diligence when giving anyone or any company your money.
there is no end in sight to this.
physics alone dictates that the pendulum will swing the other way in an equal velocity.
by this i mean the fraudsters pushed it to the point its clear regulation is needed to rope them in but in the process will tie up some legit folks.
the sad part is the regulation is not applied to the root cause; rogue mod scams are a symptom. the proper thing to do is enforce a standard modification ‘cure’ on all servicers and lenders then let them apply for tarp to offset those losses.
instead we are paying bonuses for failed businessmen.
this country has lost its soul.
I’m still trying to figure out why people are so fixated on Loan Modification’s in the first place? Almost all of my client’s have been through the ringer with their lender/Brokers (This Doesn’t mean all Brokers/Lenders), now the same bozo’s who gave them the loan are here to Save The Day! I have yet to see a Loan Modification agreement that isn’t just a bandade on someone’s situation, or that has helped keep a homeowner from being foreclosed on.
Actually, my company, actually it’s my brothers, I just leech of him for everything, is a complete ripoff.