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Common Signs of Loan Modification Scams and How to Avoid Them
For those considering loan modification, times have likely been better. Generally, people only seek information on modifying their loans after having some difficulty keeping up with their mortgage payments and other bills. They see this as an option to stay in their homes and continue getting their finances back on track.
Unfortunately, some loan modification companies are preying on these individuals with false promises and guarantees that are too good to be true. Since the Home Affordable Modification Program, or HAMP, began many opportunistic individuals, including some loan modification attorneys, have attempted to profit.
Here are some warning signs that one of these loan modification companies is attempting to add you to their list of victims.
1) They ask for upfront payments. This is one of the most important flags because of its predatory nature, and also because it is illegal to ask for money before their work on the modification has begun. Also, you should never make your monthly payments to the loan modification attorney or any other third party. Your loan is still serviced by the lender and that’s where your payments should be sent.
2) They offer results that are too good. While the purpose of the program is to reduce your monthly payments to an affordable amount, either through spreading out the repayment period, reducing interest rates or reducing the principal, if the offer sounds exceptional then be wary. Any “guarantee” or “promise”, whether it is an end to foreclosure proceedings or even acceptance into the program, should be approached with caution.
3) They can’t, or won’t, explain the services they are going to do. While the loan modification process can sometimes seem difficult or tedious for homeowners, the process is relatively straightforward. Your lender supplies a packet that must be filled out, generally including an authorization to release tax information, proof of income and bank statements, as well as an explanation of why you are having difficulty making the payments. There is no mystery or secret to the process and any reputable loan modification company should be able to explain the process to you.
Loan modifications can be confusing to many people but guard yourself against potential scams by watching out for upfront payments, too-good-to-be-true results, and mysterious methods.
Axis Bank Home Loan Documents
Today, there are a number of avenues available for procuring a home loan; Axis Bank being in the forefront. Having said that, there are certain documents that you must present to the bank upfront. These documents assist the bank to ascertain the viability of extending the loan. One must make a checklist of all the documents required for home loan to make the process smooth and easy. Here is a list of documents that you would need to provide to Axis Bank along with your home loan application.
Income Proof: The bank asks a salaried person to provide salary slips for at least the past 3 months. If self employed, the bank requires you to provide the profit and loss statements for your business. In some cases, the bank can ask for these documents for an extended period (more than 3 months) to better gauge your earning profile. You should keep in mind that if your income has gone up considerably in the past year, you should have an explanation to prove it to be stable rather than just a one-time abnormality. If you fail to provide sufficient proof, your loan eligibility may be considered against a lower average income.
Bank Account Statements: The bank requires you to present the account statement for the last 6 months. In case of salaried individuals, account statements help the bank analyze the ratio between your income and expenses. And if you are self employed, your account statements help the bank to know the extent of your business activity.
Form 16 and Income Tax Return: As an additional proof of the income that you have earned and the amount of tax levied on it, the bank will ask you to provide Form 16 obtained from your employer for the past 3 years. If you are self employed, you are required to provide the income tax returns filed by you in the past 3 years.
Residence Proof: The bank will ask you to provide a proof of your current and permanent residence in order to both identify you and maintain correspondence in the future.
Identity Proof: In order to identify you as the loan applicant, the bank will ask you to provide a valid identity proof. This allows the bank to look into your credit history. Some of the documents that are considered to be valid proofs of identity are diving license, voter ID card, PAN card, passport, ration card, bank passbook, etc.
Passport Size Photographs: You will need to attach passport size photographs on the loan application. Usually, 2 to 3 passport size photographs are required by the bank.
Apart from the basic documents listed above, certain supporting documents may also be required. The bank would require you to submit the documents showing your ownership of the property in question. These would include documents like original sale agreement, registration receipt, copy of title deed, allotment letter, possession letter, lease agreement etc. In addition to these you may also be required to submit post dated cheques for your EMIs. Documents required for home loan may vary depending upon the current rules and regulations. But generally speaking, the bank would seek the above mentioned documents, so it is advised to arrange them upfront.