Tips for Homeowners
Tips for Homeowners
If you’re a struggling homeowner, beware of people who say they can help save your home and lower or eliminate your mortgage debt. Here are a few tips that might save you heartache down the road:
- No third party can guarantee or pre-approve a federal Home Affordable Modification Program (HAMP) application…only your lender has the discretion to grant a loan modification.
- If you’re contacted by an individual or company who claims to be affiliated with HAMP or displays a seal or logo representing the U.S. government on a letter or a website, verify their claim by calling the federal government’s Homeowner’s HOPE Hotline at 1-888-995-HOPE (4673).
- Beware of anyone who wants to charge you in advance for mortgage services—in most cases, charging advance fees for mortgage modification is illegal. In 2010, the Federal Trade Commission issued the Mortgage Assistance Relief Services Rule which bans advance fees (attorneys are generally exempt from this rule with some conditions, including the requirement that they place any fees in a client trust account).
- Beware of loan modification companies disguised as law firms. These companies often employ a single attorney in order to skirt the MARS ruling banning the collection of advance fees, masking their fees as attorney retainers or consulting fees.
- Beware of unsolicited contacts as well as high-pressure sales techniques.
- Beware of companies that say you cannot obtain a loan modificaiton on your own, or that banks won’t work with you.
- Beware of claims of high-success rates (i.e., 97 percent), guaranteed extremely low interest rates (i.e., 2 percent), and money-back guarantees.
- Beware of anyone who advises you to stop making mortgage payments…and never make a mortgage payment to anyone other than your mortgage company.
- Beware of anyone who tries to convince you they can save your home if you transfer your deed to them or if you file for bankruptcy.
- Beware of anyone who offers to fill out paperwork for you, and never sign loan documents that contain blank spaces (cross out blank sections or write “NA” in the section).
- Beware of offers to participate in class action lawsuits that claim they can help save your home.
- Keep in mind that companies can purchase lists of homeowners who are delinquent on their mortgage payments. If you’re a homeowner behind on your mortgage, you may be targeted by loan modification or foreclosure rescue companies—just be sure to do your homework on these companies before giving them any of your hard-earned money.
Bottom line—if you find yourself in financial trouble, contact your lender yourself…you may be able to negotiate a new repayment schedule. Or, apply to HAMP on your own or with free help from a housing counselor approved by the Department of Housing and Urban Development. For more information, call 1-888-995-HOPE or go to www.makinghomeaffordable.gov.