Mortgage Loan Modification Scams to Watch Out For

Mortgage Loan Modification Scams to Watch Out For

A mortgage loan modification can provide an attractive option for homeowners who have either defaulted or feel that they are in danger of defaulting, on their current mortgage loans. Despite this, there are significant mortgage loan modification scams to watch out for when considering this option.

Borrowers who have defaulted on a loan may be desperate for a solution that can save their home—a situation that has motivated the formation of dishonest and opportunistic businesses looking to profit from another’s misfortune and prey on a vulnerable situation.

These businesses may advertise themselves as foreclosure prevention services, or loss mitigation companies, but the basic premise is the same—they request payment in exchange for promised assistance in obtaining a loan modification. Because many of these services are scams, it is important to consult with a reputable mortgage modification attorney before paying for assistance in obtaining a mortgage loan modification. A skilled attorney will be able to evaluate the credentials of the individual or business offering the assistance to prevent the borrower from falling prey to the scam.

Unlicensed Scam Artists Often Promise Mortgage Loan Modification Assistance

Many New Jersey mortgage loan modifications fall into a specific statutory category known as “debt adjustments”. Under New Jersey Statute 17:16G-1c(1), a debt adjuster is someone who acts as an intermediary between the borrower and lender to settle or alter the terms of the debt payment structure. This category includes individuals who promise assistance in obtaining a mortgage loan modification.

In order to provide such assistance, the individual must be licensed to act as a debt adjuster—and many individuals who offer mortgage loan modification assistance are not properly licensed in New Jersey.

Only licensed attorneys and individuals licensed under New Jersey’s Debt Adjuster Act are legally permitted to help a borrower obtain a mortgage loan modification. The primary mortgage loan modification scam to watch out for involves an unlicensed individual who will simply take the borrower’s money without providing any assistance at all.

Avoiding Mortgage Loan Modification Scams

Before seeking out a mortgage loan modification, it is important to first do some research as to the possible outcomes of the process before seeking assistance. If the promised help seems too good to be true, a good rule of thumb is that it probably is.

An attorney can provide valuable advice in this area, and can also explain that it is illegal for an individual promising mortgage loan modification assistance to accept payment before the mortgage modification is actually obtained. If the individual requires up-front payment, it is likely a mortgage loan modification scam.

Reputable Legal Assistance is Available to Help with Mortgage Loan Modification Scams to Watch Out For

Remember that an attorney is legally obligated to provide truthful advice regarding the likelihood of obtaining a mortgage modification, as well as the potential consequences of such a modification.

An experienced New Jersey attorney will not only be able to identify potential mortgage loan modification scams to watch out for but can actually help with the often intimidating process of negotiating a mortgage loan modification with the mortgage lender.