As blogged a few weeks ago by attorney Michael Dansack, Ohio’s Attorney General Richard Cordray is cracking down on mortgage foreclosure fraud by lenders. Unfortunately, many homeowners are stilled faced with the financial reality that they cannot afford their monthly mortgage payments, and are seeking ways to make their loan more affordable. One means of reducing payments is to obtain a loan modification agreement with the lender. However, it is often difficult to get a lender to discuss any options if you are not in default, and even if you are in default, there is no requirement for a lender to offer, or approve a loan modification.
Fortunately, in Ohio, there are a few HUD approved organizations, including ESOP and Save the Dream Ohio, which offer free services for distressed homeowners. Both of these organizations offer their free assistance to homeowners that are at risk of foreclosure due to factors such as reduction in income, unemployment, death of a spouse, or adjustable interest rates.
Unfortunately, there are many organizations that are all too willing to take advantage of distressed homeowners. They charge outrageous up-front fees, up to $2,500.00 in some cases, despite the fact that they will do little or nothing to help the homeowner. In some cases the homeowner is advised skip making their mortgage payment to pay their fee.
According to the non-profit organization Lawyers Committee for Civil Rights Under the Law, consumers need to watch out for requests to pay a fee, sign a contract, redirect mortgage payments, sign over title to property, or recommendations to stop making loan payments. These are all indications of a loan modification scam. If you have been solicited or presented with an agreement with any of the red flags mentioned, not only should you refuse to act on any of the requests, but you should report the company to Prevent Loan Scams.