- 1). Refuse to deal with any agent or service that demands a payment or fee up front. Loan-modification companies are legally not allowed to ask for money before services are rendered. You should report any agency who asks for money up front to 1-888-995-HOPE. This organization is affiliated with the U.S. Department of Housing and Urban Development.
- 2). Look for loan-modification service providers that are certified by the U.S. Department of Housing and Urban Development. These service providers have had to have their practices legally vetted by the government.
- 3). Avoid service providers that only accept payment via cashier's check or wire transfer. These types of payment are frequently used by scammers because it is difficult to get money back once it is transferred using these methods.
- 4). Continue to pay your lender or loan servicer. Loan-modification companies who are operating legally will not ask you to stop payments on your loan. A common scam used involves scammers asking you to make payments to them, with the promise that they will pay the lender. Often they simply take the money.
- 5). Call your lender and see it they approve of the loan-modification company. This may seem like you are talking to the enemy, but you have to remember that ultimately you have a common goal. The lender will know who is a valid company and may know of some scam companies.
- 6). Do not sign any documents that you do not understand or that have blank spaces on them. Consult a lawyer if needed.
- 7). Do not sign your house over to the loan-modification company. A common scam involves asking you to sign over your house, with the promise that the company will take over payments and you can pay them back slowly. This usually results in the home owner being evicted by the scammer.
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