Mortgage loan modification brokers are called by different names, including loan modification consultants, and loan modification experts. Many of these brokers claim to offer loan modification assistance to borrowers facing foreclosure, and while many brokers are legitimate business people, borrowers must be aware of the number of scammers operating as mortgage loan modification brokers.
Following the fall of the housing market in 2007, a new opportunity presented itself for scammers and con-artists all attempting to make a quick buck at the expense of desperate homeowners. Individuals from all walks of life, even some from the same lending industry that created the collapse in the first place, went into business for themselves as mortgage loan modification experts. Many of these experts were self proclaimed experts with little to no training or experience relevant to saving people from foreclosure. They offered to negotiate with lenders on behalf of borrowers, sometimes promising guaranteed results.
It wasn’t long before borrowers started to realize that they were being taken for a ride by these “experts” who collected hundreds, if not thousands, of dollars in fees only to produce little to no results on a fairly consistent basis.
As more and more homeowners fell victim to the scam, various legislative bodies and consumer protection agencies began to take notice. In California, laws were passed forbidding non-attorney mortgage loan modification experts from accepting upfront fees before any work is done on a person’s loan. Other laws throughout the United States require mortgage loan modification brokers to register their practices with the real estate and / or financial regulatory agencies in their jurisdictions.
Currently, not every jurisdiction has laws that restrict the practices of these experts / consultants, which is why borrowers should educate themselves on the risks of hiring a non-attorney loan modification consultant to negotiate with their lenders. In most cases, the fact that a person has been made the victim of a scam will not elicit any mercy from a lender, and they will usually carry on with business as usual, leaving the borrower to worry about how they are going to recover from their predicament.
What makes the idea of hiring a non-attorney mortgage loan modification broker so scary is the fact that becoming one is so easy. In most states, all a person needs to do to become a loan modification consultant or expert is apply for a business license, which is usually fairly easy to do. In fact, in some states, a person can be up and running as a loan modification expert within 30 days. It is this ease of access into the loan modification industry that presents so many dangers for homeowners who are already desperate and willing to pay anybody with a sales pitch that sounds promising.
Borrowers should always research the companies they hire to handle matters as complex as loan modifications. A loan modification is a legal process that involves many intricate steps and one single error by the “expert” with less experience than they originally claimed is enough to ruin a person’s financial future.