Customers nationwide have turned to Better Business Bureau, state attorneys general and the Federal Trade Commission with complaints about loan modifications. The FTC has issued multiple warnings about loan modification and forensic audit scams. BBB registered approximately 1,400 complaints against loan modification companies in 2011.
Consumers who need help with their mortgage should consider the following tips:
· Talk to your lender. Before paying an outside company to negotiate with your mortgage provider, try to get some relief yourself for free. Many companies will work with a consumer to avoid foreclosure.
· Use a licensed company. Any business offering loan modification services must be licensed. Search the agent or company name in the National Mortgage Licensing System to ensure you are not dealing with a scammer.
· Know where to turn. If you feel your mortgage provider is treating you unfairly, file a complaint with the BBB online. The FTC also operates a national hotline 24/7 for consumers who need free personalized advice, 1-888-995-HOPE.
· Start with trust. Check out the company’s BBB Business Review at bbb.org to see its BBB rating, complaint history and more.
· Report fraud. If you have been scammed, report your experience to BBB, the FTC (www.ftc.gov); or the Nevada State Attorney General (Nevada State Attorney General).
· Watch for red flags. The FTC lists several warning signs that a loan modification offer may be a scam, including:
- guarantees to stop the foreclosure process — no matter your circumstances;
- instructs you not to contact your lender, lawyer or credit or housing counselor;
- collects a fee before providing any services or accepts payment only by cashier’s check or wire transfer;
- encourages you to lease your home so you can buy it back over time;
- recommends that you make your mortgage payments directly to loan modification company, rather than your lender;
- urges you to transfer your property deed or title to the company;
- offers to buy your house for cash at a fixed price that is inappropriate for the housing market;
- pressures you to sign papers you haven’t had a chance to read thoroughly or that you don’t understand.
To check the reliability of a company and find trustworthy businesses, visit bbb.org.
About Better Business Bureau:
BBB's mission is to be the leader in advancing marketplace trust. BBB accomplishes this mission by creating a community of trustworthy businesses, setting standards for marketplace trust, encouraging and supporting best practices, celebrating marketplace role models and denouncing substandard marketplace behavior.
Businesses that earn BBB Accreditation contractually agree and adhere to the organization's high standards of ethical business behavior. BBB is the preeminent resource to turn to for objective, unbiased information on businesses and charities.
Contact BBB serving Southern Nevada at 702-320-4500.
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