6 Tips to Protect Foreclosures in Santa Cruz from Loan Modification Scams

Posted by Lauren Spencer on Thursday, November 12th, 2009 at 3:13pm.

Many facing the possibility of being added to the number of foreclosures in Santa Cruz are frightened, often frustrated and feel helpless. It’s understandable; nobody wants to lose their home. However, those feelings often lead to being victimized by loan modification con artists who promise freedom from foreclosure for a little bit of money and leave victims in their wake.

Here are a few tips to protect yourself from scams that could take you one step closer to becoming one of the foreclosures in Santa Cruz:

1. Never believe a guarantee. No one, company or individual, can guarantee loan modification or that your lender won’t foreclose. If the loan modification company starts spouting guarantees, walk away.

2. Never sign over power of attorney. Sometimes, con artists will tell you that if you sign over your house to them, their good credit can help save your home. This is never a legitimate proposal and no legitimate company will ask you to do this.

3. Never spend thousands of dollars. Fees higher than $6,000 should be dismissed. Often, scam companies will charge absurdly high upfront fees to help. While some counselors will charge you a fee, those costs are added up after the loan closes, NOT before they even do anything. As well, any company charging over $4,000 needs to have a proven high quality of service and level of success.

4. Always talk to your lender first. Many loan modification scam artists will tell you to stop communicating with your lender. Communication is key, however, since your lender owns the note and will, ultimately, approve or deny the modification. Talk to your lender to find out how to refinance or restructure your payment.

5. Always check with the Better Business Bureau before hiring a “rescue” company. You can check with the Attorney General or Real Estate Commission as well.

6. Always look for free services first. Many foreclosure specialists can help, and will do so free of charge if you can’t afford them. As well, the U.S. Department of Housing and Urban Development (HUD) has approved housing counseling that will provide foreclosure prevention services, also free of charge.

When you’re already faced with the possibility of being one of the foreclosures in Santa Cruz, you need help – not someone who will push you further across the line. Be careful when looking for loan modification help.

If your loan modification has been denied and you need to do a short sale instead, I can help. Call me at 831.662.6522 or email me at lauren@laurenspencer.com for more information.

 

Links:

Victimized by loan modification con artists

Better Business Bureau

Approved housing counseling

About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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