California Department of Real Estate issues a new Consumer Alert – Don’t fall victim to a loan modification scam!

Yesterday the California Department of Real Estate issued a new Consumer Alert to give homeowners tips to avoid Loan Modification and “Mortgage Relief” scams. I receive several calls per month from homeowners who feel that they are victims of these scams, and I can not offer much help except to direct them to report the scam to the Better Business Bureau, the California Department of Real Estate or their local law enforcement.

A few tips to make sure you do not fall victim to loan modification scam;

  • Don’t believe promises that are too good to be true. No one can guarantee that a “mortgage relief” plan will be be successful.
  • NEVER pay an upfront fee for loan modification services. Such fees are illegal in California. Advance fees for short sale services, deed-in-lieu of foreclosure and other residential mortgage foreclosure rescue services are also illegal under a new federal rule, with a very limited exception for fees paid to lawyers.
  • Check with the Better Business Bureau, and verify the existence of appropriate licensing for anyone offering those services.
  • Google the company name to see if you can find any red flags.