How To Detect and
Avoid Loss Mitigation Scams
By Curt Pifer
This page is going to save you a lot of money, time and agony.
You're in deep do-do with your mortgage company or servicer. They want "their" money and they want it now - or else.
You need help but don't know where to turn when your mortgage company's loss mitigation department is being unhelpful, unfair and maybe even downright abusive.
Make no bones about it. You absolutely need professional help when it comes to "mitigating" your foreclosure situation. Dealing with your lender on your own is like peforming surgery on yourself - it's going to hurt and it will leave scars.
A competent, honest third party loss mitigation service provider is your best bet to win your foreclosure battle. The trouble is that "Loss Mitigation" and "Loan Modification" have become the latest "Business Opportunity" buzzword on the Internet and with that comes a flood of people looking to make money in the foreclosure business by fair means or foul and you are the target.
There are only Four Loss Mitigation Remedies:
-
Litigation - filing a lawsuit against parties involved in your mortgage transaction. You will need a "good" lawyer for that.
-
Loan Modification - this is the "best" loss mitigation remedy but nearly impossible to obtain unless you know how to apply and what the guidelines are for an approval.
-
Repayment Plans - mistakenly referred to as Forbearance Plans.
-
Pre-foreclosure Sale - also referred to as Compromise Sale and, in the situation where there is no equity in the subject property - Short Sale.
Now, there are about 30 or so variations of these four basic loss mitgation remedies. There is no way that you, as a homeowner, would ever know there are so many choices and options available. Your servicer will never tell you about all of your options because that would require too much work on their part, they are swamped with work, or they are not properly trained on all the remedies available. Now the government may buy your loan and you might have to deal with a government employee?
Hope for Homeowners is a scam too. You got screwed on your loan, Wall Street screwed the investors who bought you loan and now we, the taxpayers, have to bail out a rotten mortgage industry. Folks, to date, the government has screwed up everything they touch. Don't buy into another government boondoggle for relief. They are out to save the banks - not you! Sad but true.
CLICK HERE TO SEE OUR LOAN MODIFICATION SPECIAL
Here's another sad truth. Most loss mitigation companies today make their money selling Business Opportunities not helping distressed homeowners. Loss mitigation is a specialized niche of the mortgage industry. It takes training and experience to be successful. That is why you hear about so many loss mitigation scams that take people's money, promise help and do little or nothing to help the homeowner. Most of the people who buy into these opportunities are not crooks, they too were duped and most of the time, they are already just as financially strapped as you are. Your money is "spent" the moment you send it off. Be informed.
So, with so much BS flying around; where do you turn?
Your best bet for real, legitimate help is to hire a specially trained Realtor or an experienced mortgage professional who has a "fiduciary" responsibility to do what is right for you. Don't act desperate and don't make impulsive choices based on vague promises. Verify, verify and verify some more. Always do your "due diligence" before you make any investment. This is your home, your credit, the basis for your future wealth and your financial future at stake.
Let's get down to brass tacks of loss mitigation scam avoidance:
CHECKLIST OF LOSS MITIGATION RIP-OFF PROTECTION ACTION ITEMS
-
Be alert and suspicious of the "Help" solicitations in your mailbox. They are most likely from "unqualified" wanna be real estate investors looking for a deal or bankruptcy attorneys looking to sell you a premature bankruptcy solution that you cannot afford.
-
The same holds true for telemarketers; be alert.
-
Loss Mitigation or Loan Modification Lead Farms. While you surf the Net for a solution, you may be induced to fill out an online application. Beware, most online foreclosure sites are NOT loss mitigation service companies at all. They are lead generation farms that harvest your information and sell that information to anyone who willl pay their outrageous lead fees, usually a bogus and invisible Loan Modification Company. (Up to $35.00 each?) That's not right.
Here are some pointers on how to handle phone calls offering foreclosure relief:
A. Always get the first and last name of the person who is calling you, the name of the company for whom they are calling. Listen for any hesitation from the caller. They are either unsure at best or their are spinning a yarn. Hang up.
B. Always ask where the company is headquartered and get the main telephone number of the company. Verify. Call the BBB in that city. Companies are not required to be members of the BBB. Any company can sign up with the BBB for a fee and many scams use the BBB logo to perpetrate their crimes then disappear. We prefer Google, The Bad Business Bureau and Scams.com to do our own research.
C. Always ask for the name of the owner or owners of the company. Google the company and the owners before you send any money. Verify.
D. Always ask the telemarketer how long he or she has been with the company and how long the company has been in business.
-
There is no guaranty for any particular or specific solution. Loss mitigation is much like arguing a case in court. Your attorney cannot guaranty that you will or will not go to jail. If anyone promises you a loan modification for an up-front fee, for instance - just hang up. You will save a ton of money, time and grief.
-
Always ask if the loss mitigation company offers a payment plan. If they demand their entire fee upfront, your money will most likely disappear. Hang up the phone. A legitimate company will always offer some terms on a big ticket item. Don't make any decision if you feel pressured.
-
Always ask if the loss mitigation company offers pre-foreclosure sales assistance. If the company cannot or does not offer assistance with all four of the loss mitigation remedies listed above, they are not a full-service loss mitigation company. Hang up.
Many so-called loss mitigation companies are fronts for fraudulant real estate investment schemes by well intentioned but otherwise misinformed or unqualifed "investors" who do not have the money or resources to help you. Commonly, an investor will offer to help you do do a Short Sale on your property. Their intention is to submit a low-ball offer to your mortage company in the hope of getting a good deal for themselves OR they will try to sell (assign)your house to another investor for a fee. This is an illegal practice in every State. Either way, this is a waste of everyone's time. It boggs down the mortgage company, your foreclosure clock is still ticking and you will get foreclosed on.
- Always ask how many Short Sales the company or anyone who is not a Realtor has successfully completed. Even if you are working with a licensed real estage agent, make sure they have short sale negotiating experience. If not, you will likely get foreclosed on. Any realtor can list your home, most will not want to work hard to sell your home.
- A fair loss mitigation service fee should not exceed one mortgage payment or 1% of the original loan amount. Remember, you paid at least 2 or 3 percent to originate your loan and up to 10% in total closing costs. If you have an Alt-A or Sub-Prime Loan, you paid far more in fees. A legitimate loss mitigation company will work hard to repair your existing mortgage or help you sell your home to avoid foreclosure. They deserve every nickel for their effort.
- A full service loss mitigation company has the resources to stand with you for the long haul. After we mitigate your foreclosure, we can restore your credit and good name again. That too is a process.
The sooner you get started, the sooner you will get back on track with your mortgage and other finances. You just have to care enough to reach out for help and be a part of the healing process. Money, by itself, will not cure your problem. We have to work together.
IT'S NOT ALL DOOM AND GLOOM!
CLICK HERE TO SEE OUR LOAN MODIFICATION SPECIAL
SUCCESSFUL LOSS MITIGATION
The best time to start your research to get professional help is after you have missed your second mortgage payment. If you can afford your mortgage, you can probably save your home, save a lot of time, money and stress when you hire a professional loss mitigator to work for you. Again, reach out to trained industry professionals to help you. Our U.S. HomeSavers Loss Mitigation Association Members are all experienced business owners and professsionals who have been in business for years.
If you are experiencing a temporary set-back and your mortgage company will not work with you in good faith, a trained, experienced loss mitigator can provide you with options to stay in your home longer without the fear of getting tossed out with nowhere to go.
If you are in over your head, upside down on your mortgage and just need to bail out, an honest, hard working, experienced loss mitigation professional can help turn your tragedy into hope, put money in your pocket and get a new start in life - the right way.
If you need legal help, a professional loss mitigator has the resources to help you determine if you were scammed or if your rights were violated by your mortgage originator, broker, lender, title company or servicer. If this is you, get mad, get even and get compensated!! We offer free attorney referrals and consultations or cheap attorney consultations in all 50 States.
You Are Not Alone!
You Need A Real Friend And Confidant. Call Curt or Liz for A Free Consultation Today.
877-818-2500
Free Information: Spam Free Scam Free Newsletter.
