Mortgage Modification News And Alerts

Mortgage Modification News And Alerts

By:


*The Buzz:

Hard times always bring out the scammers, and today is no exception. According to the Department of Housing and Urban Development (HUD), a multi-agency crackdown has targeted real estate scams and frauds, as well as bolstered state and federal action and efforts to protect homeowners. An online survey by the FTC found 71 distinct companies running suspicious ads, and a US Treasury committee found nearly 180,000 fraudulent mortgage reports. The FBI is currently investigating more than 2,100 mortgage fraud cases, up 400 percent from five years ago, according to ABC News. Among those involved in the effort are the U.S. Department of the Treasury, the U.S. Department of Justice (DOJ), the Department of Housing and Urban Development (HUD), the Federal Trade Commission (FTC), and the Attorney General of Illinois.

Tom Miller, the attorney general of Iowa said, "It's becoming more and more clear to us that if you do real modifications, the default rate is significantly lower. They shouldn't be called modifications if people pay more or approximately the same."
(New York Times; Feb 19, 2009)

Most homeowners who received loan modifications from free government or lender sponsored programs actually had their payment go up. More than ever, troubled homeowners need professionals like us to navigate the bureaucracy of the lenders.

Washington Mutual is well-known for assuring homeowners of their good intentions and then stalling. If they do it, what is your lender doing?
President Obama is warning people to look out for programs where:
Youre asked to pay by wire.
You cant get them on the phone after paying.
Youre told to stop paying your mortgage.
Youre told to not contact your lender or attorney.
Youre pressured into signing documents you dont understand.
Youre asked to sign over your house title.

On May 20, 2009 President Obama signed the Helping Families Save Their Homes Act, and the Fraud Enforcement and Recovery Act (FERA):

The Helping Families Save Their Homes Act is aimed at helping homeowners by making mortgages more affordable and preventing "avoidable" foreclosures. As many as 9 million homeowners could benefit from this legislation. Obama, before signing the bill, said the bill "expands the reach of our existing housing plan for homeowners with FHA or USDA rural housing loans, providing them with new opportunities to modify or refinance their mortgages to more affordable levels." The original bill was criticized for the "cram down" provision, which according to critics would encourage borrowers to abdicate their responsibility towards loan repayment. The legislation, however, was ultimately passed without the cram down provision.

FERA is a bid to revamp the outdated and ineffective laws governing mortgage fraud. The number of investigations pertaining to mortgage fraud, initiated by the Federal Bureau of Investigation (FBI), has doubled over the past three years. The legislation, in addition to providing $331 million to agencies such as the FBI and the Securities and Exchange Commission, expands the authority of the Department of Justice "to prosecute fraud that takes place in many of the private institutions not covered under current federal bank fraud criminal statutes," according to President Obama.

New York attorney general Andrew Cuomo is turning his efforts on loan mod companies. On Tuesday, Cuomos office announced it intended to file suit against a well-known mod company. Cuomo says his investigation found the company charged hefty up-front fees in violation with state law and advertised falsely that it saw a 90 to 100% success rate. The AGs office also alleges the company didnt provide necessary contracts that would have included a required notice of right-to-cancel. This economic climate has bred an environment in which scam artists and opportunists are able to prey on vulnerable consumers on the brink of losing their most valuable possession their home, Cuomo said. New York is not the only State. California is rushing to regulate this activity along with many others.

The company I represent, Accelerated Loan Mods, is a national company owned and managed by attorneys. We are monitored and supervised by the US Dept. of Justice. The above referenced scams are obviously state-specific.

From Barbara Corcoran on the NBC Today Show, May 26, 2009:

Making Home Affordable US Govt. phone number: 888-995-HOPE
Do not sign a Transfer of Title believing it is an application for refinancing.
Beware the Rent-to-Buy scheme whereby the scammer rents your home back to you.
(In rare cases this might work, but most often they'll make sure you never catch up.)
Do not take advice to not contact your lender, lawyer, or credit counselor.
Do not pay a middleman to do your negotiating. A reputable law firm is the surest way to go.
Do not fall for Bankruptcy scams.
Beware simple, easy promises.
Always answer calls and letters from your lender.
Beware alleged connections with you.
If you don't trust your negotiator, run away.
Ask for references.
Do not sign over your property (no quitclaim deeds, warranty deed, or contract to sell)

From C Thompson, Loss Mitigation Case Officer:

(Ed note: I wish I had written this. An excellent description of a reputable firm and their process.)

How do I know which Loan Modification company's are a scam? I have been asked this question numerous times.

Unfortunately, there ARE a lot of companies who are in this new industry to scam people (approximately 75%), and some aren't educated enough to know that they are hurting people instead of helping.

This is what I found during my research:

Tell tale signs of a Loss Mitigation Scam:

Charges a huge upfront fee:
There are some Loan Modification companies who will charge sometimes up to $7500 to contact your lender and ask for a loan mod, and in some cases, when turned down, they will keep 1/2 your money and return the rest, or may return nothing to you by claiming they did their job and are entitled to that fee. There should be a money back guarantee and have other alternatives for you.

(Ed note: $3000 is by far the national average for a competent attorney firm.)

Collects upfront fee with out explaining the process, or does not seem interested in your circumstances .

Anyone legit will listen and care about what you're going through, and will explain exactly what you are paying for and what to look forward to while on the program. There should be no unanswered questions.

Does not stop the foreclosure legally:

If your home is in foreclosure and a company negotiates on your behalf, what if the lender takes a long time to respond? Your may lose your home.

Will accept the first proposal from the lender:

You pay an upfront fee for a Loan Mod, and with in 90 days your bank comes back with a modification that does not suit you or your budget. (or worse had not even been contacted). Basically you bought yourself 3 months and most likely will find yourself in the same situation. Problem is, you may only utilize a 3rd party negotiator once, and you could have negotiated with your bank on your own with out the fee and ended up with the same terms. If you are working with an attorney based legit company your loan mod should turn out significantly better.

Virtual Company:

How would you feel if you went with a company that had no real office to visit and may be working out of their basement. This is a question that needs to be asked and verified.

Seem to good to be true?

If you are being promised an interest rate, or and exact prinicple reduction amount, most likely you are just being told what you want to hear. Please note that no one can promise you anything without negotiating with your lender.

Is there an approval process?

Before you agree to paying any fee at all, there should be an application process which would determine if you qualify for this assistance. This should not include credit qualifying. Credit is not a determining factor. The application should include, your budget, income, property info, and hardship, basically an entire package should be submitted and reviewed before the loan mod company decides to take on your case. Your approval should not be determined on the first phone call.

Can not find them on the BBB, or anywhere else for that matter:

Most companies who have been in business for at least a year will have a rating with the better business bureau whether they are a member or not. There are companies popping up left and right. You want to make sure you are working with a leader in the industry. Simple research can help you determine this. If you are working with an Attorney you should be able to verify his or her license through the Bar Association.

On the other hand, there are some legit companies who do what they say they will do. But just be cautious while looking for help. This is a booming industry and there is a lot of greed. Doing this kind of research can be exhausting. You may still find that after researching them you are still unsure. It is very tedious work and does take time. Aside from researching them, you should know what questions to ask review your documents carefully. I have provided some resources for you to begin your search. Better Business Bureau, Federal Trade Commission, Consumer protection agency, and rip off report.


As you can see this takes due diligence and many hours. Each company is unique in their own way and offer different services and have variable fees. After speaking with you about your unique situation and having evaluated your circumstances, I will suggest someone who suits your needs, explain the process, and will be there every step of the way.

There is assistance available to everyone in any state.

This is what we do for our clients:

We will not accept any funds until we have issued an approval which means your file has been underwritten and our attorneys agree to take on your case. Our Attorneys Legally place the foreclosure process on pause. Increased time to sell or rebuild your financial situation is an inherent benefit (Sometimes we are able to freeze your payments for up to 6 months depending on your hardship.)

Help stop harassing phone calls (tell your lender to contact your attorney who will speak on your behalf). Formulate a plan that fits with in the home owner's budget (reduced rate, 30-40 fixed term). Work to have missed payments moved to end of the loan

To work with your lender to provide you with the best modification that fits within your budget. Work to reduce or eliminate 2nd or 3rd mortgage, or ask for a principle reduction if you owe more than your loan amount. To keep your family in your home and avoid displacement. To do everything possible to work out a solution. If your lender is unwilling to work with us, they need to provide a good explanation as to why. We will then talk to you about some other foreclosure prevention options that are available to you. Our mission is for you to keep your property, but this may not be beneficial to everyone.

Provide you with a money back guarantee if for some reason we are unable to work out a solution that improves your current situation (which is about 2% after being approved though our 12 step approval process), no questions asked!

The Fees are about the only thing competitive. You may think that having a team of Attorneys and Real Estate experts, and underwriters assisting you would be very expensive. This was one of the hardest parts of my research. Finding not only legit help for my clients, but to make sure the fees are affordable was very challenging. The fees happen to be very fair and competitive with others who don't even come close to providing you with an array of services. You get more bang for your buck, that's for sure. The best thing is, you're going with a trusted company who has credentials to back that up.

David and Marty, as co-founders of ALM, structured their business to help homeowners. To help the homeowner in distress. To back up the the guy who helps the homeowner in distress (That'd be me. My name is Chris Dix). To help our economy as a whole.

ALM is currently being inducted into the Better Business Bureau. Completion and inclusion of their membership logo are imminent.

About the Author:
Chris Dix
www.Mortgage-Mod-Monster.com



Article Originally Published On: http://www.articlesnatch.com


Tags: ,

|

Loading...
Related....
Videos...

Recent Mortgage-Refinance Articles

Comments

Still can't find what you are looking for? Search for it!

Loading

Site Navigation:

Copyright 2005-2011 ArticleSnatch, LLC - All Rights Reserved.
Privacy Policy | Terms of Service.