False Mortgage Modification Promises Leave Families Struggling

No asset is more important to a family than a home. But, with the recent economic hard times, some are having trouble just keeping up with mortgage payments. This climate provides fertile ground for loan modification scammers, who target families desperate for a little relief. After collecting a hefty upfront fee, "mortgage rescue" con artists fail to follow through with promises of lowered payments and better terms.

The Scam

There are a variety of loan modification scams that borrowers may encounter. In one of the most common, a company will ask for an upfront "processing" or "administrative" fee. In return, you will be told that the terms of your mortgage will be renegotiated with your lending institution to set up more favorable payment schedules. In some cases, you will be asked not to contact your bank or financial advisor during the "negotiation" or even to stop making mortgage payments (a mistake that can lead to you losing your home).

Needless to say, after the scam artist absconds with your fee, none of the promised mortgage relief materializes.

Protect Yourself, and Seek Help

Loan modification companies are restricted by law from collecting upfront fees and instructing anyone to stop making mortgage payments without disclosing that this could lead to foreclosure and a damaged credit score. Nevertheless, thousands of families have been affected by loan modification scams. To protect yourself, steer clear of any agency asking for an advance fee or telling you to stop making mortgage payments directly to your lender. Carefully examine any documents before signing them, and if you are not sure what you are signing, by all means consult an attorney before committing to anything.

If you have been taken advantage of, you may have legal recourse against scammers: a court-ordered judgment could help you recover illegitimately collected fees. In addition, there still may be viable options to avoid foreclosure on your home, even after suffering a loss at the hands of a scam artist. Chapter 13 bankruptcy, for example, halts foreclosure proceedings and gives you the chance to keep your home and arrange a workable payment plan.

If you are seeking assistance with a loan modification, contact an experienced Chicago loan modification attorney to review your options and qualifications. If you have been victimized in a loan modification scam or have questions generally about home foreclosure, speak to an experienced bankruptcy & consumer rights attorney to assist in determining what your rights and options are.