Loan Modifications and Forensic Audits…Scams?

This week Karen Mountain, certified mortgage planner, sent us an email about loan modifications and forecnsic audits that we though was worth sharing with Women Building Wealth readers:

“This week I have had 3 different new clients receive letters from a company telling them they qualify for an “Obama Loan Program” which would lower their rate to 2-4% interest. The letters looked very official, although in the fine print, it said they were not connected to the borrower’s lender.
One offered a loan modification, two others offered “forensic loan audits.” These were sent to people who were either upside down in the mortgages, or were struggling, although current. All three letters came from the same company! And all three were scams!

In the first case, I told my new client it was a scam, that the company is easy to find on Google, and had very bad reviews. She then called her existing lender, who confirmed what I told her, and also told her she would not qualify for a modification because there was no financial hardship. (True)
In the other two cases, they were presented with ‘forensic loan audits” where the company will try to find any mistakes or fraud on the existing loan, in order to try to force the lender to reduce the rate or terms of the loan.

They paid $500 up front, and were asked for another $3500!!! Luckily, friends intervened, and they cancelled the charges on the credit cards.

It is illegal in California for anyone to charge you upfront to do a loan modification. Instead, do it yourself, or get the help from HUD, with free counseling at 1-8900-569-4287. In the case of the forensic audit, they are usually using lawyers, and they can charge up front. But they probably won’t help you. BEWARE!

The California Attorney General, Edmund G. Brown, in a press release, joining the California Dept of Real Estate and the State Bar of California in warning Californians to avoid forensic loan audits, the loan-modification industry’s latest “phony foreclosure-relief service,” in which homeowners pay up-front fees for a forensic review of their lender’s practices, but are provided no actual relief.
With more than 2000 complaints in 2009, the DRE has issued Desist and Refrain Orders to stop illegal activity to more than 350 companies.

There are options: you may be able to refinance under the Obama Plan, which allows 100% or more of appraised value. You may qualify for a loan modification, which are usually temporary. You may be able to use other property to buy your loan down to a workable amount.

Just don’t give those callers/emailers/letter writers any of your hard earned money! Be aware and BEWARE!

If you’d like to reach Karen Mountain with Priority Financial you can contact her via email or at her website. Let her know that Women Building Wealth sent you so you can receive your FREE mortgage planning session.