Many times when homeowners are experiencing financial troubles, it’s easy to fall victim to loan modification schemes. However, there are loan modification warning signs to watch out for so that you don’t become a victim. Make sure that you fully educate yourself on what a loan modification is exactly and how getting approved for one can help to resolve your financial problems.
Why apply for a loan modification?
If you can’t afford to make your mortgage payments, applying for a loan modification is a good way to permanently restructure your mortgage loan to be a more affordable payment. The purpose of a loan modification is when the lender and homeowner enter into a new agreement that allows for reduced monthly payments.
Sometimes homeowners feel that they need a representative to negotiate their loan modification. However, this is a process with the right training and education that any homeowner can complete on their own behalf.
While there are attorneys who specialize in loan modifications. Unfortunately, there are attorneys who also take advantage of homeowners in foreclosure situations. This includes companies who specialize in loan modifications, that in many situations also take advantage of desperate homeowners.
Warning Scheme Signs To Watch
These are important warning signs to watch so that you don’t fall victim to schemes.
Never stop making payments to your mortgage servicer and to someone else instead.
If a company, attorney, or any person working on a loan modification on your behalf is requesting that you stop making payments to your lender and start making the mortgage payment to them, don’t do this.
You should keep making your mortgage payments if you can while the process of your loan modification approval is being finalized.
Don’t accept rental payments if you have stopped making your monthly mortgage payments and trying to get a loan modification approved.
If you are unable to make monthly mortgage payments, don’t accept rental payments or allow someone else to accept rental payments if you are trying to work out a loan modification.
Mortgage fraud crimes also include personal gains from a property while not making monthly mortgage payments. Such mortgage fraud crimes can fall under conspiracy to commit wire and bank fraud that carry a maximum penalty of 30 years in prison.
Never report false income to get your loan modification approved.
Never report false or untrue income to have a loan modification approved. If a company or attorney working out a loan modification ask you to do this, don’t commit fraud.
Mortgage lenders will also verify your income against your tax returns as a deciding factor to approve your loan modification. If there is some inconsistency with your income, you could also be accused of attempted mortgage fraud.
The best thing that any homeowner can do in a financial crisis is to educate themselves. If you are having problems making your monthly mortgage payments or been recently denied a loan modification. Learn how-to challenge if the mortgage lender holds enforceable security interest to collect mortgage payments.
Getting a fair and favorable loan modification, is possible. Discovering the impact to rescind and cancel a mortgage loan because TILA violations for fraud is a powerful weapon to resolve mortgage problems.