Loan modification

How to Spot Foreclosure-Prevention Scammers

Here’s how the most common foreclosure-prevention scams work:

The desperate home owner gets a letter that says something like, “We know you’re having a hard time. We have a pipeline to your lender and can help you save your home. Call this toll-free number now.”

Home owners call the number and agree to pay $1,200 to $1,500 upfront for help with their mortgage. Nothing happens. Their home still goes into foreclosure.

Harold Kirtz, a lawyer for the Federal Trade Commission who is prosecuting these scammers, says victims are often well educated and financially savvy, but they also are “in a very vulnerable state.”

Here are some red flags that should make a home owner run in the opposite direction:

* If the company guarantees success. Nobody can guarantee a lender won’t foreclose or will modify a loan.
* If the company wants money upfront. “We can’t say all advance fees are illegal,” Kirtz says, “But in most cases they’re probably bogus.”
* If the company wants the home owner to send mortgage checks directly to the modification firm. The only certainty there is that the company will cash the checks.

Source: Washington Post Writers Group, Kenneth R. Harney (09/13/2009)

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Elliott Robinson, JD – Associate Broker
Keller Williams Realty Metro Atlanta
315 West Ponce de Leon Ave., Ste. 100
Decatur, GA 30030
o- (404) 564-5560
Blog – http://elliottonrealestate.com
Twitter – http://twitter.com/elliottrob

Loan modification

Lenders Avoid Loan Modifications

The Obama administration’s $75 billion foreclosure prevention effort is unlikely to succeed because mortgage lenders cannot turn a profit on modified loans, concludes a new report by the Federal Reserve Bank of Boston.

Analyzing 665,410 loans originated between 2005 and 2007 that subsequently became seriously delinquent, the Boston Fed found that only 3 percent of borrowers had their loans modified to lower monthly payments, and about 5.5 percent received workouts that did not result in lower payments.

Also, up to 45 percent of approximately 150,000 borrowers who received some kind of aid ended up in arrears again, but about 30 percent of delinquent borrowers were able to fix their problems without help from their lenders.

Source: Boston Globe, Jenifer McKim (07/07/2009)(06/25/2009)

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Elliott Robinson, JD – Associate Broker
Adams Realtors
458 Cherokee Ave. SE
Atlanta, GA 30312
(o) 404-688-1222