Loan Modification Scams on the Rise

As interest rates on adjustable mortgages continue to increase, the number of homeowners finding themselves in a tight spot also rises. The equity that was supposed to insulate those homeowners from losing their home has been lost as home values decreased rapidly. Although the government, along with many companies and non-profit groups, have reached out to assist these troubled homeowners, there are still loan modification scammers who are willing to take advantage of the situation.

Lessle Giacobbi advises homeowners to beware of loan modification fraud:

“Many homeowners have been considering a loan modification. Here is some helpful information we recently ran across from the Department of Real Estate (DRE) and California Association of REALTORS® (CAR).The DRE recently issued a fraud warning alerting consumers about loan modification scams and informing consumers of what they can do to protect themselves. The alert is available in both English and Spanish. Last July, the DRE had fewer than 10 complaints involving loan modification companies; today the department has 750 pending investigations. In addition, since last October, the DRE has filed more than 200 desist and refrain orders.”

The problem of loan modification fraud has reached the federal level ,with the FBI investigating many of these cases. One sign that a company may be trying to defraud a homeowner seeking a loan modification, suggests InjuryBoard.com, is the request for an up-front fee before any work is done.

Click through to read Leslie Giacobbi’s full blog.

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