August 22, 2013 /24-7PressRelease/
-- When the housing bubble burst in the U.S. in the mid-2000s, housing prices plummeted and many in Louisiana and across the U.S. found themselves underwater in their mortgages. As the economy went into recession, thousands lost jobs and became unable to make their mortgage payments. As foreclosures swept the U.S., scam artists began to target vulnerable people facing foreclosure.
Mortgage modification companies promised struggling homeowners
mortgage modifications for high up-front fees. The companies would then disappear without doing anything for the homeowners. The federal government began pursuing criminal charges against some of the worst scam artists in 2012, but the fraud still continues in 2013. People should be aware of these scams and how to avoid them.
Mortgage scams nation-wide problem
In 2010, the Lawyers' Committee for Civil Rights Under Law, a civil rights advocacy group, started a database of mortgage modification scam reports to document the extent of the problem of mortgage modification scams. By October 2012, the database had cataloged $63 million in losses to mortgage modification scams.
The federal government's Distressed Homeowner Initiative filed criminal charges against 530 people in the fiscal year that ended October 1, 2012, alleging they defrauded about 73,000 homeowners facing foreclosure
of over $1 billion across the U.S.
Avoid mortgage modification scams
Homeowners can take steps to avoid mortgage modification scams. The most important thing to remember is that if an offer sounds too good to be true, it probably is. People should be suspicious of any person or company that guarantees a mortgage modification. Homeowners should never pay fees up-front for mortgage modification services. Mortgage modification companies are not allowed to collect money until they provide homeowners with written offers from mortgage lenders or servicers that the borrowers decide to accept. Homeowners may also refuse the offer and not have to pay the mortgage modification company anything.
Some scams trick homeowners into transferring the titles of their homes to the mortgage modification company with promises that the homeowners can still live in their houses as renters and buy their homes back at a later date. The scam artist then takes the title, drains the home of equity and leaves the house in default. People should never transfer ownership of their homes.
Do not delay seeking help
When pursuing a mortgage modification, it is important for people to act in a timely manner. Some Louisiana homeowners facing foreclosure wait to file for a mortgage modification until almost the day their houses are up put up for auction at a sheriff's sale. The consequences for waiting too long are severe; in most cases people lose their homes.
Those who have tried to obtain mortgage modifications and were unsuccessful may believe that there is no other way to save their homes. However, those facing foreclosure may want to consider filing Chapter 13 bankruptcy. Filing bankruptcy puts an automatic stay on collection actions, including foreclosure. The Chapter 13 repayment plan can help people become current in their mortgage payments, as well.
If you are a Louisiana homeowner facing foreclosure, do not wait to seek help. Speak with an experienced Louisiana debt relief attorney who can discuss all of the options available to you for preventing foreclosure.
Article provided by Derren S. Johnson & Associates
Visit us at www.derrensjohnson.com