Loan Mod Dos and Don’ts

[The following info is taken from a recent letter from the California Attorney General’s Office, some minor edits has done to the article]

Californians should be deeply skeptical of anyone who demands money up front and makes extravagant promises that they can save their home. DON’T pay money upfront to people who promise to work with your lender to modify your loan.

It is unlawful for foreclosure consultants to collect money before
 (1) they give you a written contract describing the series they promise to provide  and
(2) they actually perform all the services described in the contract, such as negotiating new monthly payments of a new mortgage loan.
However, an advance fee may be charged to an attorney, or by a real estate broker who has submitted to advance fee agreement to the Department of Real Estate, for review.

DON’T  pay your mortgage payments to someone other than your lender or loan servicer, even if he or she promises to pass the payment on. Fraudulent foreclosure consultants often keep the money for themselves.
DON’T sign any documents without reading them first. Many homeowners think that they are signing documents for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership to the “rescuer”.
DON’T ignore letters from your lender.Consider contracting your lender yourself, some lenders are willing to work with homeowners who are behind on their payments.

DO call your lender yourself. Your lender wants to hear from you, and may be more  willing to work directly with you than with a foreclosure consultant.
DO
contact housing counselor approved by the U.S. Department of Housing and Urban Development (HUD), who may be able to help you for free. For a referral to a housing counselor near you, contact HUD at 1-800-569-4287 or www.hud.gov. If you transferred your property or paid someone to “rescue” you from foreclosure, you may be a victim of a crime. You can file a complaint with the Attorney General’s Office at the following address:
Office of the Attorney General Public Inquiry Unit, P.O. Box 944255, Sacramento, CA 94244, or online at www.ca.gov/consumers.

Infomation above arranged and provided by REFERRAL REALTY

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