loan modification http://www.wisebread.com/taxonomy/term/11112/all en-US 5 Reasons Not to Apply for a Loan Modification in the Home Affordable Modification Program (HAMP) http://www.wisebread.com/five-reasons-not-to-apply-for-a-loan-modification-in-the-home-affordable-modification-program-hamp <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/five-reasons-not-to-apply-for-a-loan-modification-in-the-home-affordable-modification-program-hamp" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000005550102XSmall.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>The <a href="http://www.wisebread.com/details-of-obamas-mortgage-plan-released-will-you-benefit">Home Affordable Modification Program (HAMP)</a> rolled out last year currently has over 700,000 people in trial modifications and a little over 30,000 in &quot;permanent&quot; modifications. The program has been plagued with consumer complaints of lost paperwork and denials. Here are some reasons why many consumers are better off skipping this program all together.</p> <h3>1. The &quot;permanent&quot; modification is not so permanent.</h3> <p>Those who are getting &quot;permanent&quot; modifications are actually getting an adjustable loan with a five year period of low interest. This was spelled out in the original program, so it is not very accurate to say that these modifications are permanent. It may be helpful to those who are confident that they can pay the readjusted terms in five years, but those who are applying should be aware that this modification may just delay an eventual foreclosure.</p> <h3>2. Money spent on trial modifications could be used elsewhere.</h3> <p>Many consumers are reporting that they are paying for trial modifications for many months and then face a denial of the modification. In these cases they would have been <a href="http://www.nytimes.com/2010/01/02/business/economy/02modify.html?scp=1&amp;sq=us%20loan%20effort&amp;st=cse">better off to just save the money</a> while waiting for the bank to foreclose. Currently banks are very slow to foreclose and those who simply default end up saving a good chunk of change.</p> <h3>3. Debt is not reduced.</h3> <p>In many instances, those who go through the modification program end up with more debt than they started with as the banks roll in late fees and payments into the principal. In most cases the debt principal is not reduced and troubled homeowners are left paying for an asset that is worth less than their debt.</p> <h3>4. Credit is not saved.</h3> <p>Some consumers mistakenly believed that their credit will be saved if they enrolled in the modification program, but the truth is that banks are <a href="http://money.cnn.com/2009/12/28/news/economy/loan_modifications_credit_history/">reporting trial modifications to credit bureaus as partial payments</a> and credit scores are lowered nevertheless.</p> <h3>5. The program cannot help the unemployed.</h3> <p>Many people are having trouble paying their mortgages due to unemployment, but HAMP is specifically meant to reduce mortgage payments to 31% of a borrower's pretax income. If a borrower has no income then this program will not help.</p> <p>The Obama administration is trying to get banks to make the modification process easier for consumers by sending &quot;SWAT teams&quot; to the servicers. It is yet to be seen how the program will fare this year, but so far it simply accomplished the feat of putting 30,000 homeowners into new adjustable rate mortgages with a five year teaser rate. Many of those denied the &quot;permanent&quot; modification unnecessarily drained their bank accounts.</p> <p><em>What are your experiences with HAMP?</em></p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Ffive-reasons-not-to-apply-for-a-loan-modification-in-the-home-affordable-modification-program-hamp&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Reasons%2520Not%2520to%2520Apply%2520for%2520a%2520Loan%2520Modification%2520in%2520the%2520Home%2520Affordable%2520Modification%2520Program%2520%2528HAMP%2529.jpg&amp;description=5%20Reasons%20Not%20to%20Apply%20for%20a%20Loan%20Modification%20in%20the%20Home%20Affordable%20Modification%20Program%20(HAMP)"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Reasons%20Not%20to%20Apply%20for%20a%20Loan%20Modification%20in%20the%20Home%20Affordable%20Modification%20Program%20%28HAMP%29.jpg" alt="5 Reasons Not to Apply for a Loan Modification in the Home Affordable Modification Program (HAMP)" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/five-reasons-not-to-apply-for-a-loan-modification-in-the-home-affordable-modification-program-hamp">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tips-for-avoiding-a-foreclosure-prevention-or-loan-modification-scam">Tips for Avoiding a Foreclosure Prevention or Loan Modification Scam</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-signs-youre-paying-too-much-for-your-mortgage">8 Signs You&#039;re Paying Too Much for Your Mortgage</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-we-all-just-stop-paying-the-mortgage">Should We All Just Stop Paying the Mortgage?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/get-help-with-your-underwater-bank-of-america-mortgage">Get Help With Your Underwater Bank of America Mortgage</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/speeding-through-your-mortgage-0">Speeding through your mortgage</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing loan modification mortgage Tue, 05 Jan 2010 14:00:10 +0000 Xin Lu 4451 at http://www.wisebread.com Tips for Avoiding a Foreclosure Prevention or Loan Modification Scam http://www.wisebread.com/tips-for-avoiding-a-foreclosure-prevention-or-loan-modification-scam <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/tips-for-avoiding-a-foreclosure-prevention-or-loan-modification-scam" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/foreclosure.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>Rising home loan delinquencies and foreclosures have made con artists very&nbsp; busy.&nbsp; These scammers use the public records to find homeowners who are in trouble, and then use a variety of schemes to take the homeowners'&nbsp; money and property in the name of helping the homeowner avoid foreclosure.&nbsp;&nbsp; If you have late payments on your home loan then it is likely that you will be targeted. The following are some warning signs that you are dealing with a possible scammer.</p> <p><strong>Unsolicited contact </strong>- If you receive an unsolicited call or letter promising help, verify that the person promising help is actually from your lender or servicer.&nbsp; Technically only your lender or servicer has the power to modify your loan.&nbsp; Scammers use the public records to find out the default status of homeowners, and some of them<a href="http://www.latimes.com/news/local/la-me-mortgage-fraud6-2009jul06,0,6867637.story"> pretend to be the lender holding the lien</a>.&nbsp; However, you can usually verify if the offer for help is real by contacting your lender's public customer service line.<br /> <strong><br /> Pretending to be from the government</strong> - We all know that there has been several federally sponsored <a href="http://www.wisebread.com/details-of-obamas-mortgage-plan-released-will-you-benefit">loan modification</a> and <a href="http://www.wisebread.com/the-more-questionable-aspects-of-the-housing-bailout-bill">bank&nbsp; bailout programs</a>.&nbsp; However, these programs ask homeowners to contact their lenders for help.&nbsp; If you receive unsolicited contact from someone saying they are affiliated with the government then it is a warning sign it's a scammer trying to sound legitimate.</p> <p><strong>Great promises </strong>- Con artists are usually very good salesmen, and many of them promise that they can get the homeowner out of trouble with certainty.&nbsp; If it sounds too good to be true it usually is.</p> <p><strong>High pressure </strong>- If the nice promises do not work, some scammers go straight for the vulnerability of those in trouble.&nbsp; For example, they would ask a person if they really want to live on the streets.&nbsp; If you feeling pressured or threatened by someone promising to help then it is a sign to walk away.</p> <p><strong>Advanced fees&nbsp; </strong>- If a company asks you for a few thousand dollars to start&nbsp; the process, it's most likely a scam.&nbsp; When a legitimate lender modifies or refinances your loan they add up the costs at closing. Once you hand over the advanced fee there is really no guarantee that the company will do anything. There are legitimate housing counselors that charge fees for their services, but consumers should make sure that they have actually received the services before paying.</p> <p><strong>Diverted mortgage payments</strong> - Some scammers tell a troubled homeowner that they already negotiated a lower mortgage with the lender and that the homeowner should send the lower payment to the scammers instead of the lender. Even though this scheme is fairly easy to verify through the lender, sometimes troubled homeowners do not figure out that the lender is not receiving any money until months later.</p> <p><strong>Suspicious advice</strong> - Scammers often give advice such as &quot;stop talking to your lender&quot; or &quot;you are not obligated to pay your loan.&quot;&nbsp; They want the troubled homeowner to talk to them only.&nbsp; Make sure to communicate with your actual lender.</p> <p><strong>Property transfer</strong> - Many scammers ask troubled homeowners to sign over the property so that they could make the mortgage payments.&nbsp; The fact is that the scammers do not have to make mortgage payments on the property, and often times they use the properties to defraud&nbsp; lenders.</p> <p><strong>Power of attorney </strong>- Some scammers ask troubled homeowners to sign over the power of attorney to another person.&nbsp; This basically allows them to act on the homeowner's behalf on many legal documents.&nbsp; Giving away the power of attorney is actually worse than signing away the home.</p> <p>If you suspect that you are being scammed you should definitely report the details to the <a href="https://tips.fbi.gov/ ">FBI </a>or the <a href="http://www.ftc.gov/bcp/ ">FTC</a> as well as your local consumer protection agencies.&nbsp; If you really need help dealing with your lender then there are <a href="http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm">legitimate housing couselors available at the HUD </a>and their services do not cost thousands of dollars.&nbsp;</p> <p><em><strong>Have you been contacted by a scammer or have you been scammed?&nbsp; What did you do?&nbsp; </strong></em></p> <p>&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/tips-for-avoiding-a-foreclosure-prevention-or-loan-modification-scam">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-vicious-home-rental-scam-dont-get-conned">The vicious Home Rental Scam – don’t get conned.</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/must-watch-video-for-new-real-estate-investors">Must Watch Video for New Real Estate Investors</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-can-renters-do-if-their-landlords-are-in-foreclosure">What can renters do if their landlords are in foreclosure?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-buying-a-foreclosed-home-ever-a-good-idea">Is Buying a Foreclosed Home Ever a Good Idea?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-downsides-of-a-reverse-mortgage">5 Downsides of a Reverse Mortgage</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Consumer Affairs Real Estate and Housing foreclosure loan modification scam Fri, 10 Jul 2009 16:00:09 +0000 Xin Lu 3372 at http://www.wisebread.com