Loan Modification Fraud is not Something to Laugh at

With so many homeowners looking toward loan modification to avoid a foreclosure, it's no surprise that more and more are getting scammed by loan modification fraud. Lenders are pensive to accept loan modifications and homeowners looking to seek legal assistance to get them to accept their application are being led on by untruthful companies who are committing loan modification fraud.

Lenders have criteria a homeowner must meet to be able to qualify for loan modification, a large portion of the criteria vague. If a homeowner does not qualify they are left wondering if it was a fluke or really the case. Loan modification fraud companies usually prey specifically on those who tried to apply and were denied for one reason or another. These scammers will claim they can have the homeowner's loan modification application approved with no chance of denial. They make it seem like all the homeowner needs is a skilled specialist team to get their loan modification approved -- and while this is true is some cases, a specialist or two is not going to turn the tide for an unqualified homeowner.

In most cases companies or agents committing loan modification fraud will ask for an upfront fee to either negotiate, get the paperwork done and through the system, or even as a "good will deposit" to the lender. They have reportedly charged homeowners across the country anywhere from $150 dollars to $5,000 dollars to "help" with their loan modification. Some of the scammers committing fraud even charge another fee later on for "additional negotiation" or untruthful fees they say the lender is charging them. In all cases these fees they charge for dealing with the lender are 100 percent falsified and are only lining their own pockets with the money that homeowners desperately need for themselves to afford their mortgage.

In order to take the homeowner's mind off of paying their mortgage and instead giving the money to them, several of the companies committing loan modification fraud will reassure the homeowner that they do not need to pay their mortgage. That, in fact, paying their mortgage will slow down the negotiation process and that their lenders will see it as a good sign. This is completely false. Some lenders look at whether or not a homeowner has made their payments late or not, but when a homeowner repeatedly misses their mortgage payments it can be seen as a bad sign. There are homeowners who have been pushed to foreclosure by those committing loan modification fraud because they spent all their money on false help, were told not to pay their mortgage, and could not cope when the foreclosure came and there was no warning.

The FBI is currently trying to weed out those committing loan modification fraud from the legitimate specialists, but in the meantime homeowners must think with their head and not with their ailing wallet.

For additional information on loan modifications, visit Home Loan Modifications.