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Scammers Use Obama Foreclosure Plan to Exploit Homeowners Desperate for Mortgage Loan Modifications

April 17, 2009

Our Anaheim Hills mortgage loan modification lawyers get far too many calls from homeowners who have fallen victim to foreclosure prevention scams. That's why we were pleased to see a San Francisco Chronicle article March 15 warning homeowners about the scams, some of which now rely on the name of President Barack Obama to make their case. As we've written here before, the president's foreclosure prevention plan includes provisions to help homeowners negotiate a loan modification with their lenders, as well as provisions to make refinancing more achievable. Scammers are using those features to pitch their services, which are mostly designed to separate desperate homeowners from their money.

The scammers generally tell homeowners that they will renegotiate mortgages on their behalf, lowering their monthly payments, in exchange for thousands of dollars in fees. At best, these organizations then perform services that homeowners could easily handle themselves or do forensic loan audits that don't help much. At worst, the scammers get legal access to the property and use it to steal the home outright or help themselves to the homeowners' equity. The newspaper cautioned readers not to trust any organization that requires up-front fees or suggests that you pay the mortgage to it rather than the lender.

As legitimate Yorba Linda loan modification attorneys, we help clients fight scammers whenever we can with predatory lending lawsuits. Unfortunately, this new foreclosure prevention industry is not regulated, so merely giving you nothing of value for your money is not illegal or actionable -- although taking homeowners' money and doing nothing at all is theft. As the newspaper noted, homeowners who want to check up on a company can check real estate professionals' licenses with the state Department of Real Estate, and make sure California loan modification attorneys are legitimate at the State Bar of California's site. Homeowners can also set up a free counseling session with a counselor approved by the federal government.

At Howard Law LLP, our Brea mortgage loan modification lawyers provide real help to our clients by bringing a lawyer's skills and experience to the negotiating table. Attorneys are professional negotiators who understand their clients' legal rights and are willing to enforce them, where appropriate, with legal action. Our Fountain Valley loan modification attorneys have helped many clients reach agreements that end costly "exotic" mortgage features such as an adjustable interest rate, and lower payments to a level that allows them to stay out of default. If your family is facing default on your mortgage and you believe changes to your loan can stop it, we would like to help. To set up a free, confidential consultation, please contact us online or call toll-free at 1-800-872-5925.