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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.
Free annual credit report: let your mind credit ratings
Free annual credit report is a yearly summary of how the main consumer reporting companies (Equifax, Experian, and TransUnion) judge your credit worthiness. This report is accumulated by these companies who take information provided by your creditors such as lending institutions and even landlords. Moreover, this credit report specifically covers details like every credit card opened in your name, every loan opened in your name, a complete breakdown of your payment history, a report of all the companies that have reviewed your credit report and a line-by-line comparison of the information on each of the credit reports from the three credit bureaus
It also contains information like, Personal information, information related to credit card account, current balance, and previous accounts, bankruptcy, tax liens, financial judgment and credit inquiries etc. There are many occasions on which you are allowed to request a free credit report and score from the credit reporting agency used by a company. These occasions can be in the form such as you are allowed to request to see the credit report if a company denies you credit, insurance, or employment etc.
Free annual credit report can be easily provided to you once in a 12 month after your request. It helps you to maintain good credit score in the market. The credit report can also be downloaded over the Internet. There are huge numbers of online agencies deliver this free service. However, to find right agency to start accessing into your monetary standing, do some online research.
Hence it an advice, you must be careful when signing up for any of these programs in order to obtain your free credit score as there are other companies, which may or may not be scrupulous, advertising these same services and benefits. If you are persuade to use one of these services in order to obtain your free credit score, keep in mind that many of these companies are not as interested in getting your report as much as they are getting hold of your information. Just be alert that the company you are signing up with is one of these three agencies and not a separate company.